TULSA, Okla., Jan. 25, 2023 (GLOBE NEWSWIRE) --

CEO Commentary

Stacy Kymes, president and chief executive officer, stated, "The strong results of the fourth quarter continue to build on the earnings momentum we have been developing throughout 2022. This quarter was the highest pre-provision net revenue in our history. We enjoyed loan growth, net interest margin expansion, strong capital levels and balance sheet liquidity while asset quality remains very strong. We also took actions in the fourth quarter to move toward a more neutral interest rate position. Our fee businesses remained strong for the quarter and for the year in spite of the worst combined equity and fixed income markets since the late 1960's. I am proud of the results our team is delivering. Our thoughtful growth, diverse business mix, resilient geographic footprint, and proven credit discipline have BOK Financial well-positioned as we begin 2023."

Fourth Quarter 2022 Financial Highlights

(Unless indicated otherwise, all comparisons are to the prior quarter)

Net income was $168.4 million or $2.51 per diluted share for the fourth quarter of 2022 and $156.5 million or $2.32 per diluted share for the third quarter of 2022.
Net interest revenue totaled $352.6 million, an increase of $36.3 million. Net interest margin was 3.54 percent compared to 3.24 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate another 125 basis points in the fourth quarter. The resulting impact on market interest rates increased our net interest margin.
Fees and commissions revenue was relatively consistent with the prior quarter at $193.6 million. Increased brokerage and trading revenue, transaction card revenue, and other revenue was offset by lower revenue from mortgage banking and deposit service charges.
The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $1.2 million for the fourth quarter of 2022 compared to $4.8 million for the third quarter of 2022.
Operating expense increased $23.7 million to $318.5 million. Personnel expense increased $16.1 million, largely driven by higher incentive compensation expense. Non-personnel expense increased $7.6 million, primarily related to project-related professional fees and data processing and communications costs.
Period-end loans increased $767 million to $22.6 billion at December 31, 2022. Of this increase, commercial loans increased $591 million, commercial real estate loans grew $133 million, and loans to individuals increased $49 million. In addition, unfunded loan commitments grew by $839 million. Average outstanding loan balances were $22.0 billion, a $377 million increase.
We recorded a $15.0 million provision for expected credit losses in the fourth quarter of 2022, primarily due to strong growth in loans and loan commitments. The level of uncertainty in the economic outlook remained high and key economic factors were slightly less favorable to economic growth across all scenarios. We also recorded a $15.0 million provision for expected credit losses in the third quarter of 2022, primarily as a result of growth in loans and loan commitments during the quarter. The combined allowance for credit losses totaled $297 million or 1.31 percent of outstanding loans at December 31, 2022. The combined allowance for credit losses was $298 million or 1.37 percent of outstanding loans at September 30, 2022.
Average deposits decreased $1.6 billion to $35.5 billion and period-end deposits decreased $1.9 billion to $34.5 billion, consistent with industry trends as customers redeploy resources following the savings trend during the height of the pandemic. Average demand deposits were reduced by $929 million and average interest-bearing deposits decreased $659 million. The loan to deposit ratio was 65 percent at December 31, 2022 and 60 percent at September 30, 2022.
The company's common equity Tier 1 capital ratio was 11.69 percent at December 31, 2022. In addition, the company's Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent at December 31, 2022. At September 30, 2022, the company's common equity Tier 1 capital ratio was 11.80 percent, Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent.
The company repurchased 314,406 shares of common stock at an average price of $103.14 a share in the fourth quarter of 2022.

Fourth Quarter 2022 Segment Highlights

Commercial Banking contributed $139.4 million to net income in the fourth quarter of 2022, an increase of $5.5 million. Combined net interest revenue and fee revenue increased $25.5 million, primarily due to the increase in the spread on deposits sold to our Funds Management unit. Net loans charged-off increased $14.9 million. Personnel expense increased $3.4 million, driven by incentive compensation costs associated with growth in revenue. Average loans increased $350 million or 2 percent to $18.3 billion. Average deposits decreased $1.1 billion or 6 percent to $16.8 billion.
Consumer Banking contributed $9.0 million to net income in the fourth quarter of 2022, an increase of $6.0 million over the prior quarter. Combined net interest revenue and fee revenue increased $6.7 million. Net interest revenue increased $9.4 million, largely due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $2.6 million. Deposit service charges decreased $1.5 million from reduced consumer overdraft charges as expected from changes implemented in the fourth quarter. Mortgage banking revenue decreased $1.2 million due to reduced mortgage production volume combined with narrowing margins. Operating expense increased $1.3 million. Average loans increased $39 million or 2 percent to $1.7 billion. Average deposits decreased $196 million or 2 percent to $8.6 billion.
Wealth Management contributed $41.6 million to net income in the fourth quarter of 2022, consistent with the third quarter of 2022. Our diverse set of investment-focused businesses, which include trading in fixed income securities and other financial instruments and providing wealth management services to institutional and private wealth clients, produced total net interest and fee revenues of $149.1 million, an increase of $2.4 million. Total revenue from institutional trading activities increased $2.7 million, primarily due to a higher volume of residential mortgage-backed securities trading activity. Other revenue decreased $2.3 million due to lower energy hedging in the fourth quarter. Operating expense increased $2.9 million, mainly due to increased volume-driven incentive compensation costs. Average loans increased $59 million or 3 percent to $2.2 billion. Average deposits decreased $110 million or 1 percent to $7.9 billion. Assets under management were $99.7 billion, an increase of $4.3 billion.

Annual 2022 Financial Highlights

(Unless indicated otherwise, all comparisons are to the prior year)

Net income was $520.3 million or $7.68 per diluted share for the year ended December 31, 2022 and $618.1 million or $8.95 per diluted share for the year ended December 31, 2021.
Net interest revenue totaled $1.2 billion, an increase of $93.3 million. Net interest margin was 2.98 percent compared to 2.60 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 425 basis points since the beginning of 2022. The resulting impact on market interest rates has increased net interest margin.
Fees and commissions revenue decreased $11.1 million to $657.2 million. A $56.5 million decrease in mortgage banking revenue due to increasing mortgage interest rates and continued inventory shortages was largely offset by increased customer hedging, investment banking, and fiduciary and asset management revenues.
The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $12.5 million for the year ended December 31, 2022 compared to a net benefit of $21.0 million for the year ended December 31, 2021, due to increased market volatility throughout 2022.
Other gains and losses, net, decreased $63.6 million due to sales of an alternative investment and repossessed assets in the prior year.
Operating expense decreased $13.2 million to $1.2 billion. Personnel expense decreased $24.5 million, largely driven by lower incentive compensation expense, partially offset by an increase in regular compensation. Non-personnel expense increased $11.2 million, primarily related to additional business promotion fees and project-related data processing and communications and professional fees. These were partially offset by lower mortgage banking costs and expenses on repossessed assets.
Period-end loans increased $2.4 billion to $22.6 billion at December 31, 2022. Of this increase, commercial loans increased $1.7 billion, commercial real estate loans increased $775 million, and loans to individuals grew by $146 million. Paycheck Protection Program loans decreased $262 million. Average outstanding loan balances were $21.3 billion, a $216 million decrease.
We recorded a $30.0 million provision for expected credit losses in 2022, primarily due to strong growth in loans and loan commitments, partially offset by improvement in credit quality metrics. The uncertainty in our economic forecast increased and some key economic factors were less favorable to growth across all scenarios. A negative $100.0 million provision for expected credit losses was recorded in 2021. The combined allowance for credit losses totaled $297 million or 1.31 percent of outstanding loans at December 31, 2022. The combined allowance for credit losses was $289 million or 1.43 percent of outstanding loans at December 31, 2021.
Average deposits decreased $70 million to $37.9 billion and period-end deposits decreased $6.8 billion to $34.5 billion. In the first half of the year, the majority of deposit outflows were driven by institutional clients moving to off-balance sheet alternatives seeking higher yields. Starting in the third quarter, deposit outflows were largely attributed to commercial clients redeploying capital. The fourth quarter also saw seasonal declines due to mortgage tax disbursements.

2022 Annual Segment Highlights

Commercial Banking contributed $460.4 million to net income in 2022, an increase of $131.8 million compared to 2021. Combined net-interest revenue and fee revenue increased $215.5 million. Net interest revenue increased $208.7 million, primarily due to growth in average deposit balances and an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue increased $6.8 million as increases in customer hedging revenue and transaction card revenue were largely offset by a decline in other revenue. Operating expense increased $9.6 million, primarily due to incentive compensation costs. The prior year also included the sale of an alternative investment that resulted in a $31.1 million pre-tax gain, net of non-controlling interest. Net loans charged-off decreased $13.4 million. Average Commercial Banking loans increased $700 million or 4 percent to $17.6 billion. Average Commercial Banking deposits grew $664 million or 4 percent to $18.3 billion.
Consumer Banking contributed $5.9 million to net income in 2022, a decrease of $21.8 million compared to the prior year. Combined net interest revenue and fee revenue increased $3.3 million. Net interest revenue increased $54.7 million, primarily due to an increase in the spread on deposits sold to our Funds Management unit. Fees and commissions revenue decreased $51.4 million, largely attributable to reduced mortgage production volume and margin compression. The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $12.5 million for the year ended December 31, 2022 compared to a net benefit of $21.0 million for the year ended December 31, 2021. Interest rate volatility affected the effectiveness of our mortgage servicing rights hedging strategy. Operating expense was consistent with the prior year. Average Consumer Banking loans decreased $81 million or 5 percent to $1.7 billion. Average Consumer Banking deposits increased $323 million or 4 percent to $8.8 billion.
Wealth Management contributed $106.2 million to net income in 2022, a decrease of $7.1 million compared to 2021. Total Wealth Management revenue decreased $11.7 million. Total revenue from trading activities decreased $89.5 million compared to the year ended December 31, 2021, largely due to disruption in the fixed income markets due to economic uncertainty, primarily in the first quarter, combined with narrowing margins and lower trading volumes. This decrease was partially offset by an increase in the spread on deposits sold to our Funds Management unit. Fiduciary and asset management revenue also increased $18.0 million. Growth in mutual fund fees and decreased waivers were partially offset by lower trust fees and managed account fees due to market driven declines in assets under management or administration. Other revenue increased $26.7 million, largely due to higher derivative margin use fees. Operating expense decreased $8.5 million due to incentive compensation costs related to reduced trading activity. Average Wealth Management loans grew $185 million or 9 percent to $2.2 billion. Average Wealth Management deposits decreased $935 million or 10 percent to $8.5 billion. Average assets under management decreased $5.2 billion or 5 percent compared to the prior year.

(Unless indicated otherwise, comparisons are to the prior quarter)

Net Interest Revenue

Net interest revenue was $352.6 million for the fourth quarter of 2022, an increase of $36.3 million. The rapid increase in interest rates, combined with our strong loan growth and our asset sensitive position, drove a linked quarter increase in net interest revenue and a 30 basis point increase in net interest margin to 3.54 percent. In response to rising inflation, the Federal Reserve increased the federal funds rate 125 basis points in the fourth quarter bringing the year-to-date total rate increases to 425 basis points. The resulting impact on market interest rates has increased net interest margin as our earning assets, led by our significant percentage of variable-rate commercial loans, reprice at a higher rate and faster pace than our interest-bearing liabilities.

Average earning assets increased $757 million. Average loan balances increased $377 million, largely due to growth in commercial and commercial real estate loans. Average available for sale securities increased $648 million as we reposition our balance for the current rate environment. Average interest bearing cash and cash equivalents decreased $180 million while average trading securities decreased $91 million. Average interest-bearing deposits decreased $659 million as customers redeploy resources following the savings trend during the height of the pandemic. Average other borrowings increased $994 million while funds purchased and repurchase agreements increased $246 million.

The yield on average earning assets was 4.53 percent, up 82 basis points. The loan portfolio yield increased 110 basis points to 5.99 percent while the yield on trading securities was up 98 basis points to 3.70 percent. The yield on the available for sale securities portfolio increased 33 basis points to 2.54 percent. The yield on interest-bearing cash and cash equivalents increased 219 basis points to 4.06 percent.

Funding costs were 1.57 percent, an 81 basis point increase. The cost of interest-bearing deposits increased 59 basis points to 1.22 percent. The cost of other borrowings was up 175 basis points to 4.08 percent while the cost of funds purchased and repurchase agreements increased 133 basis points to 2.05 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 58 basis points, an increase of 29 basis points.

Operating Revenue

Fees and commissions revenue totaled $193.6 million for the fourth quarter of 2022, relatively unchanged from the prior quarter.

Brokerage and trading revenue increased $2.0 million. Trading revenue grew $9.5 million, largely due to an increase in volume and higher margins on U.S. agency residential mortgage-backed securities trading activity driven by favorable market conditions and increased market volatility. A decline from heightened energy derivative activity in the third quarter led to a $4.7 million decrease in customer hedging revenue. Total investment banking revenue decreased $2.4 million, following record levels in the third quarter. Other revenue increased $1.6 million, largely due to higher revenue on repossessed assets while transaction card revenue grew $1.2 million along with a rise in seasonal transaction volumes.

Deposit service charges decreased $2.3 million. In the fourth quarter, we implemented changes to eliminate non-sufficient funds fees and reduce consumer overdraft fees. Mortgage banking revenue decreased $1.2 million with a reduction in mortgage production revenue partially offset by an increase in mortgage servicing revenue. Mortgage production volume decreased $119 million to $111 million as rising mortgage interest rates and continued inventory constraints place pressure on mortgage loan originations.

Other gains and losses, net, increased $7.4 million, primarily driven by the sale of a repossessed entity combined with a change in the value of deferred compensation investments, which are held to offset the cost of various employee benefit programs. We also recognized a $4.0 million loss on the sale of available for sale securities in the fourth quarter as we repositioned our balance sheet for the current rate environment.

Operating Expense

Total operating expense was $318.5 million for the fourth quarter of 2022, an increase of $23.7 million compared to the third quarter of 2022.

Personnel expense increased $16.1 million. Cash-based incentive compensation increased $9.9 million due to increased sales activity combined with a one-time incentive given to all employees in the fourth quarter. Deferred compensation expense, which is offset by deferred compensation investments in other revenue, increased $4.9 million.

Non-personnel expense was $132.0 million, up $7.6 million. A $4.3 million increase in professional fees and services and $1.3 million increase in data processing and communications expense was largely attributed to ongoing technology projects. The fourth quarter of 2022 also included a $2.5 million charitable donation to the BOKF Foundation as we continue to focus on the communities we serve.

Loans, Deposits and Capital

Loans

Outstanding loans were $22.6 billion at December 31, 2022, growing $767 million over September 30, 2022, largely due to growth in commercial and commercial real estate loans. Unfunded loan commitments were also up $839 million over the third quarter.

Outstanding commercial loan balances, which includes services, general business, energy, and healthcare loans, increased $591 million with strong growth in all categories.

Services sector loan balances increased $151 million to $3.4 billion or 15 percent of total loans. Services loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local municipal government entities, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors.

General business loans increased $368 million to $3.5 billion or 16 percent of total loans. General business loans include $2.1 billion of wholesale/retail loans and $1.4 billion of loans from other commercial industries.

Energy loan balances increased $53 million to $3.4 billion or 15 percent of total loans. The majority of this portfolio is first lien, senior secured, reserve-based lending to oil and gas producers, which we believe is the lowest risk form of energy lending. Approximately 72 percent of committed production loans are secured by properties primarily producing oil. The remaining 28 percent is secured by properties primarily producing natural gas. Unfunded energy loan commitments were $3.8 billion at December 31, 2022, an increase of $334 million over September 30, 2022.

Healthcare sector loan balances increased $18 million, totaling $3.8 billion or 17 percent of total loans. Our healthcare sector loans primarily consist of $3.2 billion of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally, we loan to borrowers with a portfolio of multiple facilities, which serves to help diversify risks specific to a single facility.

Commercial real estate loan balances grew $133 million and represent 20 percent of total loans. Loans secured by industrial facilities increased $118 million to $1.2 billion. Loans secured by multifamily residential properties increased $86 million to 1.2 billion. This growth was partially offset by a $33 million decrease in loans secured by office buildings and $27 million decrease in other real estate loans. Unfunded commercial real estate loan commitments were $3.1 billion at December 31, 2022, an increase of $144 million over September 30, 2022.

Loans to individuals increased $49 million and represent 17 percent of total loans. Total residential mortgage loans increased $22 million while personal loans increased $27 million.

Liquidity and Capital

Our funding sources, which primarily include deposits and borrowings from the Federal Home Loan Banks, provide adequate liquidity to meet our needs. The loan to deposit ratio was 65 percent at December 31, 2022 providing significant on-balance sheet liquidity to meet future loan demand and contractual obligations.

Period-end deposits totaled $34.5 billion at December 31, 2022, a $1.9 billion decrease, largely due to commercial clients redeploying capital following the savings trend during the pandemic combined with seasonal mortgage tax disbursements. Demand deposits decreased $1.6 billion while interest-bearing transaction account balances decreased $341 million. Period-end Commercial Banking deposits decreased $1.4 billion, Consumer Banking deposits declined $354 million, and Wealth Management deposits were largely unchanged. Average deposits were $35.5 billion at December 31, 2022, a $1.6 billion decrease. Average demand deposit account balances decreased $929 million and average interest-bearing transaction account balances decreased $658 million.

The company's common equity Tier 1 capital ratio was 11.69 percent at December 31, 2022. In addition, the company's Tier 1 capital ratio was 11.71 percent, total capital ratio was 12.67 percent, and leverage ratio was 9.91 percent at December 31, 2022. At the beginning of 2020, we elected to delay the regulatory capital impact of the transition of the allowance for credit losses from the incurred loss methodology to CECL for two years, followed by a three-year transition period. This election added 8 basis points to the company's common equity tier 1 capital ratio at December 31, 2022. At September 30, 2022, the company's common equity Tier 1 capital ratio was 11.80 percent, Tier 1 capital ratio was 11.82 percent, total capital ratio was 12.81 percent, and leverage ratio was 9.76 percent.

The company's tangible common equity ratio, a non-GAAP measure, was 7.63 percent at December 31, 2022 and 7.96 percent at September 30, 2022. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on available for sale securities. The company has elected to exclude unrealized gains and losses from available for sale securities from its calculation of Tier 1 capital for regulatory capital purposes, consistent with the treatment under the previous capital rules.

The company repurchased 314,406 shares of common stock at an average price of $103.14 a share in the fourth quarter of 2022. The company repurchased a total of 1,632,401 shares of common stock at an average price of $94.88 a share in 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

Credit Quality

Expected credit losses on assets carried at amortized cost are recognized over their projected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Our models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rates and West Texas Intermediate ("WTI") oil prices on a probability weighted basis.

A $15.0 million provision for credit losses was necessary for the fourth quarter of 2022, primarily related to strong growth in loans and unfunded commitments during the quarter. The level of uncertainty in the economic outlook of our reasonable and supportable forecast remained high, and key economic factors were slightly less favorable to economic growth across all scenarios.

The probability weighting of our base case reasonable and supportable forecast remained at 50 percent in the fourth quarter of 2022 as the level of uncertainty in economic forecasts remained high. Our base case reasonable and supportable forecast assumes inflation continues to improve from the peak experienced in the third quarter of 2022 and slowly normalizes. We expect the impact of the Russian-Ukraine conflict remains isolated. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, resulting in below-trend GDP growth. GDP is projected to grow by 0.9 percent over the next twelve months. Job openings revert to more normalized levels and overall hiring levels decline, causing the national unemployment rate to modestly increase over the next four quarters. Our forecasted civilian unemployment rate is 3.9 percent for the first quarter of 2023, increasing to 4.1 percent by the fourth quarter of 2023. Our base case also assumes the Federal Reserve increases the federal funds rate twice in the first quarter of 2023, resulting in a target range of 4.75 percent to 5.00 percent. No additional rate increases in 2023 are anticipated. WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of December 2022, averaging $75.05 per barrel over the next twelve months.

Our downside case, probability weighted at 40 percent, assumes that inflation moderates slightly from the peak experienced in the third quarter of 2022, but remains elevated through the forecast horizon ending 2023 at 5.0 percent. Higher levels of inflation force the Federal Reserve to adopt a more aggressive monetary policy as compared to the base case scenario. This results in a federal funds target range of 5.75 percent to 6.00 percent by December 2023. The United States economy is pushed into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate from 4.8 percent in the first quarter of 2023 to 6.0 percent in the fourth quarter of 2023. In this scenario, real GDP is expected to contract 1.3 percent over the next four quarters. WTI oil prices are projected to average $65.87 per barrel over the next twelve months, peaking at $70.78 in the first quarter of 2023 and falling 15 percent over the following three quarters.

Nonperforming assets totaled $300 million or 1.33 percent of outstanding loans and repossessed assets at December 31, 2022, compared to $336 million or 1.54 percent at September 30, 2022. Excluding loans guaranteed by U.S. government agencies, nonperforming assets totaled $121 million or 0.54 percent of outstanding loans and repossessed assets at December 31, 2022, compared to $144 million or 0.67 percent at September 30, 2022.

Nonaccruing loans were $122 million or 0.54 percent of outstanding loans at December 31, 2022. Nonaccruing commercial loans totaled $60 million or 0.42 percent of outstanding commercial loans. Nonaccruing commercial real estate loans totaled $17 million or 0.36 percent of outstanding commercial real estate loans. Nonaccruing loans to individuals totaled $45 million or 1.20 percent of outstanding loans to individuals.

Nonaccruing loans decreased $9.0 million compared to September 30, 2022, primarily related to nonaccruing services, energy and loans to individuals, partially offset by an increase in nonaccruing commercial real estate loans. New nonaccruing loans identified in the fourth quarter totaled $32 million, offset by $9.1 million in payments received.

Potential problem loans, which are defined as performing loans that, based on known information, cause management concern as to the borrowers' ability to continue to perform, totaled $94 million at December 31, 2022, compared to $95 million at September 30, 2022. A decrease in potential problem services, energy and general business loans was offset by an increase in healthcare and commercial real estate potential problem loans.

At December 31, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $297 million or 1.31 percent of outstanding loans and 278 percent of nonaccruing loans. The allowance for loan losses totaled $236 million or 1.04 percent of outstanding loans and 221 percent of nonaccruing loans. At September 30, 2022, the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $298 million or 1.37 percent of outstanding loans and 262 percent of nonaccruing loans. The allowance for loan losses was $242 million or 1.11 percent of outstanding loans and 212 percent of nonaccruing loans. The allowance to nonaccruing loan percentages referenced above omit residential mortgage loans guaranteed by U.S. government agencies.

Gross charge-offs were $17.8 million for the fourth quarter compared to $1.8 million for the third quarter of 2022. Gross charge-offs for the fourth quarter were primarily related to a single services borrower. Recoveries totaled $2.3 million for the fourth quarter of 2022 and $1.3 million for the prior quarter. Net charge-offs were $15.5 million or 0.28 percent of average loans on an annualized basis in the fourth quarter compared to net charge-offs of $457 thousand or 0.01 percent of average loans on an annualized basis in the third quarter. Net charge-offs were 0.10 percent of average loans over the last four quarters.

Securities and Derivatives

The fair value of the available for sale securities portfolio totaled $11.5 billion at December 31, 2022, a $1.5 billion increase compared to September 30, 2022. At December 31, 2022, the available for sale securities portfolio consisted primarily of $5.8 billion of residential mortgage-backed securities fully backed by U.S. government agencies and $4.5 billion of commercial mortgage-backed securities fully backed by U.S. government agencies. At December 31, 2022, the available for sale securities portfolio had a net unrealized loss of $866 million compared to $936 million at September 30, 2022.

We hold an inventory of trading securities in support of sales to a variety of customers. At December 31, 2022, the trading securities portfolio totaled $4.5 billion compared to $2.2 billion at September 30, 2022.

The company also maintains a portfolio of residential mortgage-backed securities issued by U.S. government agencies and interest rate derivative contracts as an economic hedge of the changes in the fair value of our mortgage servicing rights. This portfolio of fair value option securities increased $263 million to $297 million at December 31, 2022.

Derivative contracts are carried at fair value. At December 31, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under our customer derivative programs totaled $1.0 billion compared to $1.5 billion at September 30, 2022. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $1.0 billion at December 31, 2022 and $1.5 billion at September 30, 2022.

The net cost of the changes in the fair value of mortgage servicing rights and related economic hedges was $1.2 million during the fourth quarter of 2022, including a $2.9 million decrease in the fair value of mortgage servicing rights, $1.8 million increase in the fair value of securities and derivative contracts held as an economic hedge, and $118 thousand of related net interest expense.

Conference Call and Webcast

The company will hold a conference call at 9 a.m. Central time on Wednesday, January 25, 2023 to discuss the financial results with investors. The live audio webcast and presentation slides will be available on the company's website at www.bokf.com. The conference call can also be accessed by dialing 1-201-689-8471. A conference call and webcast replay will also be available shortly after conclusion of the live call at www.bokf.com or by dialing 1-877-407-4018 and referencing conference ID # 13735343.

About BOK Financial Corporation

BOK Financial Corporation is a $48 billion regional financial services company headquartered in Tulsa, Oklahoma with $100 billion in assets under management or administration. The company's stock is publicly traded on NASDAQ under the Global Select market listings (BOKF). BOK Financial Corporation's holdings include BOKF, NA; BOK Financial Securities, Inc., BOK Financial Private Wealth, Inc. and BOK Financial Insurance, Inc. BOKF, NA's holdings include TransFund, Cavanal Hill Investment Management, Inc. and BOK Financial Asset Management, Inc. BOKF, NA operates banking divisions across eight states as: Bank of Albuquerque; Bank of Oklahoma; Bank of Texas; and BOK Financial in Arizona, Arkansas, Colorado, Kansas and Missouri; as well as having limited purpose offices in Nebraska, Wisconsin and Connecticut. Through its subsidiaries, BOK Financial Corporation provides commercial and consumer banking, brokerage trading, investment, trust and insurance services, mortgage origination and servicing, and an electronic funds transfer network. For more information, visit www.bokf.com.

The company will continue to evaluate critical assumptions and estimates, such as the appropriateness of the allowance for credit losses and asset impairment as of December 31, 2022 through the date its financial statements are filed with the Securities and Exchange Commission and will adjust amounts reported if necessary.

This news release 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 expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "plans," "projects," "will," "intends," variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial Corporation and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(In thousands)

	Dec. 31, 2022			Sep. 30, 2022
ASSETS
Cash and due from banks	$	943,810		$	804,110
Interest-bearing cash and cash equivalents		457,906			804,799
Trading securities		4,464,161			2,194,618
Investment securities, net of allowance		2,513,687			2,572,360
Available for sale securities		11,493,860			10,040,894
Fair value option securities		296,590			33,966
Restricted equity securities		299,651			100,356
Residential mortgage loans held for sale		75,272			148,121
Loans:
Commercial		14,198,187			13,607,686
Commercial real estate		4,606,777			4,473,911
Paycheck protection program		14,312			20,233
Loans to individuals		3,737,874			3,688,627
Total loans		22,557,150			21,790,457
Allowance for loan losses		(235,704	)		(241,768	)
Loans, net of allowance		22,321,446			21,548,689
Premises and equipment, net		565,175			569,379
Receivables		273,815			200,343
Goodwill		1,044,749			1,044,749
Intangible assets, net		76,131			79,833
Mortgage servicing rights		277,608			283,806
Real estate and other repossessed assets, net		14,304			29,676
Derivative contracts, net		880,343			1,693,742
Cash surrender value of bank-owned life insurance		406,751			407,722
Receivable on unsettled securities sales		31,004			49,089
Other assets		1,354,379			1,039,194
TOTAL ASSETS	$	47,790,642		$	43,645,446

LIABILITIES AND EQUITY
Deposits:
Demand	$	13,395,337		$	14,985,115
Interest-bearing transaction		18,659,115			19,000,023
Savings		964,411			971,634
Time		1,461,842			1,459,143
Total deposits		34,480,705			36,415,915
Funds purchased and repurchase agreements		2,270,377			626,952
Other borrowings		4,736,908			234,933
Subordinated debentures		131,205			131,168
Accrued interest, taxes and expense		296,870			212,342
Due on unsettled securities purchases		147,470			205,388
Derivative contracts, net		554,900			821,275
Other liabilities		484,849			483,165
TOTAL LIABILITIES		43,103,284			39,131,138
Shareholders' equity:
Capital, surplus and retained earnings		5,519,604			5,414,879
Accumulated other comprehensive loss		(836,955	)		(904,945	)
TOTAL SHAREHOLDERS' EQUITY		4,682,649			4,509,934
Non-controlling interests		4,709			4,374
TOTAL EQUITY		4,687,358			4,514,308
TOTAL LIABILITIES AND EQUITY	$	47,790,642		$	43,645,446

AVERAGE BALANCE SHEETS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

	Three Months Ended
	Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021
ASSETS
Interest-bearing cash and cash equivalents	$	568,307		$	748,263		$	843,619		$	1,050,409		$	1,208,552
Trading securities		3,086,985			3,178,068			4,166,954			8,537,390			9,260,778
Investment securities, net of allowance		2,535,305			2,593,989			610,983			195,198			213,188
Available for sale securities		10,953,851			10,306,257			12,258,072			13,092,422			13,247,607
Fair value option securities		92,012			36,846			54,832			75,539			46,458
Restricted equity securities		216,673			173,656			167,732			164,484			137,874
Residential mortgage loans held for sale		98,613			132,685			148,183			179,697			163,433
Loans:
Commercial		13,827,517			13,481,961			13,382,176			12,677,706			12,401,935
Commercial real estate		4,488,091			4,434,650			4,061,129			4,059,148			3,838,336
Paycheck protection program		18,822			26,364			90,312			210,110			404,261
Loans to individuals		3,641,574			3,656,257			3,524,097			3,516,698			3,598,121
Total loans		21,976,004			21,599,232			21,057,714			20,463,662			20,242,653
Allowance for loan losses		(242,450	)		(241,136	)		(246,064	)		(254,191	)		(271,794	)
Loans, net of allowance		21,733,554			21,358,096			20,811,650			20,209,471			19,970,859
Total earning assets		39,285,300			38,527,860			39,062,025			43,504,610			44,248,749
Cash and due from banks		865,796			821,801			822,599			790,440			783,670
Derivative contracts, net		1,239,717			2,019,905			3,051,429			2,126,282			1,441,869
Cash surrender value of bank-owned life insurance		406,826			410,667			408,489			406,379			404,149
Receivable on unsettled securities sales		194,996			219,113			457,165			375,616			585,901
Other assets		3,216,983			3,119,856			3,486,691			3,357,747			3,139,718
TOTAL ASSETS	$	45,209,618		$	45,119,202		$	47,288,398		$	50,561,074		$	50,604,056

LIABILITIES AND EQUITY
Deposits:
Demand	$	14,176,189		$	15,105,305		$	15,202,597		$	15,062,282		$	14,818,841
Interest-bearing transaction		18,898,315			19,556,806			21,037,294			22,763,479			22,326,401
Savings		969,275			978,596			981,493			947,407			909,131
Time		1,417,606			1,409,069			1,373,036			1,589,039			1,747,715
Total deposits		35,461,385			37,049,776			38,594,420			40,362,207			39,802,088
Funds purchased and repurchase agreements		1,046,447			800,759			1,224,134			2,004,466			2,893,128
Other borrowings		2,523,195			1,528,887			1,301,358			1,148,440			880,837
Subordinated debentures		131,180			131,199			131,219			131,228			131,224
Derivative contracts, net		445,105			105,221			535,574			682,435			320,757
Due on unsettled securities purchases		575,957			331,428			380,332			519,097			629,642
Other liabilities		408,029			396,510			389,031			565,350			578,091
TOTAL LIABILITIES		40,591,298			40,343,780			42,556,068			45,413,223			45,235,767
Total equity		4,618,320			4,775,422			4,732,330			5,147,851			5,368,289
TOTAL LIABILITIES AND EQUITY	$	45,209,618		$	45,119,202		$	47,288,398		$	50,561,074		$	50,604,056

STATEMENTS OF EARNINGS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
		2022			2021			2022			2021

Interest revenue	$	451,606		$	292,334		$	1,392,102		$	1,179,929
Interest expense		98,980			15,257			180,722			61,896
Net interest revenue		352,626			277,077			1,211,380			1,118,033
Provision for credit losses		15,000			(17,000	)		30,000			(100,000	)
Net interest revenue after provision for credit losses		337,626			294,077			1,181,380			1,218,033
Other operating revenue:
Brokerage and trading revenue		63,008			14,869			140,978			112,989
Transaction card revenue		27,136			24,998			104,266			96,983
Fiduciary and asset management revenue		49,899			46,872			196,326			178,274
Deposit service charges and fees		26,429			26,718			110,636			104,217
Mortgage banking revenue		10,065			21,278			49,365			105,896
Other revenue		17,034			11,586			55,642			69,950
Total fees and commissions		193,571			146,321			657,213			668,309
Other gains, net		8,427			6,081			123			63,742
Gain (loss) on derivatives, net		4,548			(4,788	)		(73,011	)		(19,378	)
Gain (loss) on fair value option securities, net		(2,568	)		1,418			(20,358	)		(2,239	)
Change in fair value of mortgage servicing rights		(2,904	)		7,859			80,261			41,637
Gain (loss) on available for sale securities, net		(3,988	)		552			(971	)		3,704
Total other operating revenue		197,086			157,443			643,257			755,775
Other operating expense:
Personnel		186,419			174,474			670,918			695,382
Business promotion		7,470			6,452			26,435			16,289
Charitable contributions to BOKF Foundation		2,500			5,000			2,500			9,000
Professional fees and services		18,365			14,129			56,342			50,906
Net occupancy and equipment		29,227			26,897			116,867			108,587
Insurance		4,677			3,889			17,994			15,881
Data processing and communications		43,048			39,358			165,907			151,614
Printing, postage and supplies		3,890			2,935			15,857			14,218
Amortization of intangible assets		3,736			4,438			15,692			18,311
Mortgage banking costs		9,016			8,667			35,834			42,698
Other expense		10,108			13,256			40,134			54,822
Total other operating expense		318,456			299,495			1,164,480			1,177,708

Net income before taxes		216,256			152,025			660,157			796,100
Federal and state income taxes		47,864			34,836			139,864			179,775

Net income		168,392			117,189			520,293			616,325
Net income (loss) attributable to non-controlling interests		(37	)		(129	)		20			(1,796	)
Net income attributable to BOK Financial Corporation shareholders	$	168,429		$	117,318		$	520,273		$	618,121

Average shares outstanding:
Basic		66,627,955			68,069,160			67,212,728			68,591,920
Diluted		66,627,955			68,070,910			67,212,735			68,594,322

Net income per share:
Basic	$	2.51		$	1.71		$	7.68		$	8.95
Diluted	$	2.51		$	1.71		$	7.68		$	8.95

FINANCIAL HIGHLIGHTS -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and share data)

	Three Months Ended
	Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021
Capital:
Period-end shareholders' equity	$	4,682,649		$	4,509,934		$	4,737,339		$	4,849,582		$	5,363,732
Risk weighted assets	$	38,142,231		$	36,866,994		$	36,787,092		$	37,160,258		$	34,575,277
Risk-based capital ratios:
Common equity tier 1		11.69	%		11.80	%		11.61	%		11.30	%		12.24	%
Tier 1		11.71	%		11.82	%		11.63	%		11.31	%		12.25	%
Total capital		12.67	%		12.81	%		12.59	%		12.25	%		13.29	%
Leverage ratio		9.91	%		9.76	%		9.12	%		8.47	%		8.55	%
Tangible common equity ratio¹		7.63	%		7.96	%		8.16	%		8.13	%		8.61	%

Common stock:
Book value per share	$	69.93		$	67.06		$	69.87		$	71.21		$	78.34
Tangible book value per share	$	53.19		$	50.34		$	53.22		$	54.58		$	61.74
Market value per share:
High	$	110.28		$	95.51		$	94.76		$	119.59		$	110.21
Low	$	88.46		$	69.82		$	74.03		$	93.76		$	89.01
Cash dividends paid	$	36,188		$	35,661		$	35,892		$	36,093		$	36,256
Dividend payout ratio		21.49	%		22.79	%		27.02	%		57.76	%		30.90	%
Shares outstanding, net		66,958,634			67,254,383			67,806,005			68,104,043			68,467,772
Stock buy-back program:
Shares repurchased		314,406			548,034			294,084			475,877			128,522
Amount	$	32,429		$	49,980		$	24,404		$	48,074		$	13,426
Average price per share	$	103.14		$	91.20		$	82.98		$	101.02		$	104.46

Performance ratios (quarter annualized):
Return on average assets		1.48	%		1.38	%		1.13	%		0.50	%		0.92	%
Return on average equity		14.48	%		13.01	%		11.27	%		4.93	%		8.68	%
Net interest margin		3.54	%		3.24	%		2.76	%		2.44	%		2.52	%
Efficiency ratio		57.87	%		57.35	%		60.65	%		75.07	%		70.14	%

Reconciliation of non-GAAP measures:
¹Tangible common equity ratio:
Total shareholders' equity	$	4,682,649		$	4,509,934		$	4,737,339		$	4,849,582		$	5,363,732
Less: Goodwill and intangible assets, net		1,120,880			1,124,582			1,128,493			1,132,510			1,136,527
Tangible common equity	$	3,561,769		$	3,385,352		$	3,608,846		$	3,717,072		$	4,227,205

Total assets	$	47,790,642		$	43,645,446		$	45,377,072		$	46,826,507		$	50,249,431
Less: Goodwill and intangible assets, net		1,120,880			1,124,582			1,128,493			1,132,510			1,136,527
Tangible assets	$	46,669,762		$	42,520,864		$	44,248,579		$	45,693,997		$	49,112,904

Tangible common equity ratio		7.63	%		7.96	%		8.16	%		8.13	%		8.61	%

Pre-provision net revenue:
Net income before taxes	$	216,256		$	196,272		$	168,980		$	78,649		$	152,025
Provision for expected credit losses		15,000			15,000			—			—			(17,000	)
Net income (loss) attributable to non-controlling interests		(37	)		81			12			(36	)		(129	)
Pre-provision net revenue	$	231,293		$	211,191		$	168,968		$	78,685		$	135,154

Other data:
Tax equivalent interest	$	2,287		$	2,163		$	2,040		$	1,973		$	2,104
Net unrealized gain (loss) on available for sale securities	$	(865,553	)	$	(935,788	)	$	(522,812	)	$	(546,598	)	$	93,381

Mortgage banking:
Mortgage production revenue	$	(3,983	)	$	(2,406	)	$	(504	)	$	5,055		$	10,018

Mortgage loans funded for sale	$	141,090		$	260,210		$	360,237		$	418,866		$	568,507
Add: current period-end outstanding commitments		45,492			75,779			106,004			160,260			171,412
Less: prior period end outstanding commitments		75,779			106,004			160,260			171,412			239,066
Total mortgage production volume	$	110,803		$	229,985		$	305,981		$	407,714		$	500,853

Mortgage loan refinances to mortgage loans funded for sale		10	%		10	%		19	%		45	%		51	%
Realized margin on funded mortgage loans	(1.10)%			(0.41)%				0.88	%		1.64	%		2.34	%
Production revenue as a percentage of production volume	(3.59)%			(1.05)%			(0.16)%				1.24	%		2.00	%

Mortgage servicing revenue	$	14,048		$	13,688		$	11,872		$	11,595		$	11,260
Average outstanding principal balance of mortgage loans serviced for others		18,923,078			19,070,221			17,336,596			16,155,329			15,930,480
Average mortgage servicing revenue rates		0.29	%		0.28	%		0.27	%		0.29	%		0.28	%

Gain (loss) on mortgage servicing rights, net of economic hedge:
Gain (loss) on mortgage hedge derivative contracts, net	$	4,373		$	(17,027	)	$	(13,639	)	$	(46,694	)	$	(4,862	)
Gain (loss) on fair value option securities, net		(2,568	)		(4,368	)		(2,221	)		(11,201	)		1,418
Gain (loss) on economic hedge of mortgage servicing rights		1,805			(21,395	)		(15,860	)		(57,895	)		(3,444	)
Gain (loss) on changes in fair value of mortgage servicing rights		(2,904	)		16,570			17,485			49,110			7,859
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges, included in other operating revenue		(1,099	)		(4,825	)		1,625			(8,785	)		4,415
Net interest revenue on fair value option securities²		(118	)		29			275			383			259
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(1,217	)	$	(4,796	)	$	1,900		$	(8,402	)	$	4,674

²Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

QUARTERLY EARNINGS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands, except ratio and per share data)

	Three Months Ended
	Dec. 31, 2022			Sep. 30, 2022			June 30, 2022			Mar. 31, 2022			Dec. 31, 2021

Interest revenue	$	451,606		$	363,150		$	294,247		$	283,099		$	292,334
Interest expense		98,980			46,825			20,229			14,688			15,257
Net interest revenue		352,626			316,325			274,018			268,411			277,077
Provision for credit losses		15,000			15,000			—			—			(17,000	)
Net interest revenue after provision for credit losses		337,626			301,325			274,018			268,411			294,077
Other operating revenue:
Brokerage and trading revenue		63,008			61,006			44,043			(27,079	)		14,869
Transaction card revenue		27,136			25,974			26,940			24,216			24,998
Fiduciary and asset management revenue		49,899			50,190			49,838			46,399			46,872
Deposit service charges and fees		26,429			28,703			28,500			27,004			26,718
Mortgage banking revenue		10,065			11,282			11,368			16,650			21,278
Other revenue		17,034			15,479			12,684			10,445			11,586
Total fees and commissions		193,571			192,634			173,373			97,635			146,321
Other gains (losses), net		8,427			979			(7,639	)		(1,644	)		6,081
Gain (loss) on derivatives, net		4,548			(17,009	)		(13,569	)		(46,981	)		(4,788	)
Gain (loss) on fair value option securities, net		(2,568	)		(4,368	)		(2,221	)		(11,201	)		1,418
Change in fair value of mortgage servicing rights		(2,904	)		16,570			17,485			49,110			7,859
Gain (loss) on available for sale securities, net		(3,988	)		892			1,188			937			552
Total other operating revenue		197,086			189,698			168,617			87,856			157,443
Other operating expense:
Personnel		186,419			170,348			154,923			159,228			174,474
Business promotion		7,470			6,127			6,325			6,513			6,452
Charitable contributions to BOKF Foundation		2,500			—			—			—			5,000
Professional fees and services		18,365			14,089			12,475			11,413			14,129
Net occupancy and equipment		29,227			29,296			27,489			30,855			26,897
Insurance		4,677			4,306			4,728			4,283			3,889
Data processing and communications		43,048			41,743			41,280			39,836			39,358
Printing, postage and supplies		3,890			4,349			3,929			3,689			2,935
Amortization of intangible assets		3,736			3,943			4,049			3,964			4,438
Mortgage banking costs		9,016			9,504			9,437			7,877			8,667
Other expense		10,108			11,046			9,020			9,960			13,256
Total other operating expense		318,456			294,751			273,655			277,618			299,495
Net income before taxes		216,256			196,272			168,980			78,649			152,025
Federal and state income taxes		47,864			39,681			36,122			16,197			34,836
Net income		168,392			156,591			132,858			62,452			117,189
Net income (loss) attributable to non-controlling interests		(37	)		81			12			(36	)		(129	)
Net income attributable to BOK Financial Corporation shareholders	$	168,429		$	156,510		$	132,846		$	62,488		$	117,318

Average shares outstanding:
Basic		66,627,955			67,003,199			67,453,748			67,812,400			68,069,160
Diluted		66,627,955			67,004,623			67,455,172			67,813,851			68,070,910
Net income per share:
Basic	$	2.51		$	2.32		$	1.96		$	0.91		$	1.71
Diluted	$	2.51		$	2.32		$	1.96		$	0.91		$	1.71

LOANS TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

(In thousands)

	Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022		Dec. 31, 2021
Commercial:
Healthcare	$	3,845,017	$	3,826,623	$	3,696,963	$	3,441,732	$	3,414,940
Energy		3,424,790		3,371,588		3,393,072		3,197,667		3,006,884
Services		3,431,521		3,280,925		3,421,493		3,351,495		3,367,193
General business		3,496,859		3,128,550		3,067,169		2,892,295		2,717,448
Total commercial		14,198,187		13,607,686		13,578,697		12,883,189		12,506,465

Commercial real estate:
Industrial		1,221,501		1,103,905		953,626		911,928		766,125
Multifamily		1,212,883		1,126,700		878,565		867,288		786,404
Office		1,053,331		1,086,615		1,100,115		1,097,516		1,040,963
Retail		620,518		635,021		637,304		667,561		679,917
Residential construction and land development		95,684		91,690		111,575		120,506		120,016
Other commercial real estate		402,860		429,980		424,963		436,157		437,900
Total commercial real estate		4,606,777		4,473,911		4,106,148		4,100,956		3,831,325

Paycheck protection program		14,312		20,233		43,140		137,365		276,341

Loans to individuals:
Residential mortgage		1,890,784		1,851,836		1,784,729		1,723,506		1,722,170
Residential mortgages guaranteed by U.S. government agencies		245,940		262,466		293,838		322,581		354,173
Personal		1,601,150		1,574,325		1,484,596		1,506,832		1,515,206
Total loans to individuals		3,737,874		3,688,627		3,563,163		3,552,919		3,591,549

Total	$	22,557,150	$	21,790,457	$	21,291,148	$	20,674,429	$	20,205,680

LOANS MANAGED BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

	Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022		Dec. 31, 2021

Texas:
Commercial	$	6,869,979	$	6,632,610	$	6,631,658	$	6,254,883	$	6,068,700
Commercial real estate		1,555,508		1,448,590		1,339,452		1,345,105		1,253,439
Paycheck protection program		8,639		12,280		14,040		31,242		81,654
Loans to individuals		982,700		970,459		934,856		957,320		942,982
Total Texas		9,416,826		9,063,939		8,920,006		8,588,550		8,346,775

Oklahoma:
Commercial		3,379,468		3,104,037		3,125,764		2,883,663		2,633,014
Commercial real estate		582,109		608,856		576,458		552,310		546,021
Paycheck protection program		3,109		4,571		13,329		52,867		69,817
Loans to individuals		2,077,124		2,054,362		1,982,247		1,977,886		2,024,404
Total Oklahoma		6,041,810		5,771,826		5,697,798		5,466,726		5,273,256

Colorado:
Commercial		2,147,969		2,115,883		2,074,455		1,977,773		1,936,149
Commercial real estate		613,912		565,057		473,231		480,740		470,937
Paycheck protection program		1,230		1,298		8,233		28,584		82,781
Loans to individuals		241,902		237,981		234,105		236,125		256,533
Total Colorado		3,005,013		2,920,219		2,790,024		2,723,222		2,746,400

Arizona:
Commercial		1,123,569		1,101,917		1,080,228		1,074,551		1,130,798
Commercial real estate		860,947		850,319		766,767		719,970		674,309
Paycheck protection program		720		1,083		5,173		11,644		21,594
Loans to individuals		229,872		225,981		212,870		190,746		186,528
Total Arizona		2,215,108		2,179,300		2,065,038		1,996,911		2,013,229

Kansas/Missouri:
Commercial		310,715		307,446		338,337		334,371		338,697
Commercial real estate		479,968		466,955		458,157		436,740		382,761
Paycheck protection program		—		10		573		2,595		4,718
Loans to individuals		131,307		125,039		125,584		121,247		110,889
Total Kansas/Missouri		921,990		899,450		922,651		894,953		837,065

New Mexico:
Commercial		262,735		257,763		252,033		262,533		306,964
Commercial real estate		417,008		426,367		431,606		504,632		442,128
Paycheck protection program		614		991		1,792		9,713		13,510
Loans to individuals		67,163		68,095		67,026		63,299		63,930
Total New Mexico		747,520		753,216		752,457		840,177		826,532

Arkansas:
Commercial		103,752		88,030		76,222		95,415		92,143
Commercial real estate		97,325		107,767		60,477		61,459		61,730
Paycheck protection program		—		—		—		720		2,267
Loans to individuals		7,806		6,710		6,475		6,296		6,283
Total Arkansas		208,883		202,507		143,174		163,890		162,423

TOTAL BOK FINANCIAL	$	22,557,150	$	21,790,457	$	21,291,148	$	20,674,429	$	20,205,680

Loans attributed to a principal market may not always represent the location of the borrower or the collateral.

DEPOSITS BY PRINCIPAL MARKET AREA -- UNAUDITED

BOK FINANCIAL CORPORATION

(in thousands)

	Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022		Dec. 31, 2021
Oklahoma:
Demand	$	4,585,963	$	5,143,405	$	5,422,593	$	5,205,806	$	5,433,405
Interest-bearing:
Transaction		9,475,528		9,619,419		10,240,378		11,410,709		12,689,367
Savings		555,407		558,256		561,413		558,634		521,439
Time		794,002		776,306		678,127		817,744		978,822
Total interest-bearing		10,824,937		10,953,981		11,479,918		12,787,087		14,189,628
Total Oklahoma		15,410,900		16,097,386		16,902,511		17,992,893		19,623,033

Texas:
Demand		3,873,759		4,609,255		4,670,535		4,552,001		4,552,983
Interest-bearing:
Transaction		4,878,482		4,781,920		5,344,326		4,963,118		5,345,461
Savings		178,356		179,049		183,708		182,536		178,458
Time		356,538		343,015		333,038		329,931		337,559
Total interest-bearing		5,413,376		5,303,984		5,861,072		5,475,585		5,861,478
Total Texas		9,287,135		9,913,239		10,531,607		10,027,586		10,414,461

Colorado:
Demand		2,462,891		2,510,179		2,799,798		2,673,352		2,526,855
Interest-bearing:
Transaction		2,123,218		2,221,796		2,277,563		2,387,304		2,334,371
Savings		77,961		80,542		82,976		81,762		78,636
Time		135,043		151,064		160,795		165,401		174,351
Total interest-bearing		2,336,222		2,453,402		2,521,334		2,634,467		2,587,358
Total Colorado		4,799,113		4,963,581		5,321,132		5,307,819		5,114,213

New Mexico:
Demand		1,141,958		1,296,410		1,347,600		1,271,264		1,196,057
Interest-bearing:
Transaction		691,915		717,492		845,442		888,257		858,394
Savings		112,430		113,056		115,660		115,457		107,963
Time		133,625		142,856		148,532		156,140		163,871
Total interest-bearing		937,970		973,404		1,109,634		1,159,854		1,130,228
Total New Mexico		2,079,928		2,269,814		2,457,234		2,431,118		2,326,285

Arizona:
Demand		844,327		903,296		901,543		947,775		934,282
Interest-bearing:
Transaction		739,628		788,142		792,269		810,896		834,491
Savings		16,496		18,258		17,999		18,122		16,182
Time		24,846		26,704		28,774		27,259		31,274
Total interest-bearing		780,970		833,104		839,042		856,277		881,947
Total Arizona		1,625,297		1,736,400		1,740,585		1,804,052		1,816,229


Kansas/Missouri:
Demand		436,259		479,459		537,143		553,345		658,342
Interest-bearing:
Transaction		694,163		747,981		913,921		1,107,525		1,086,946
Savings		20,678		19,375		19,943		19,589		18,844
Time		12,963		13,258		13,962		11,527		12,255
Total interest-bearing		727,804		780,614		947,826		1,138,641		1,118,045
Total Kansas/Missouri		1,164,063		1,260,073		1,484,969		1,691,986		1,776,387

Arkansas:
Demand		50,180		43,111		41,084		38,798		42,499
Interest-bearing:
Transaction		56,181		123,273		130,300		122,020		119,543
Savings		3,083		3,098		3,125		3,265		3,213
Time		4,825		5,940		6,371		6,414		6,196
Total interest-bearing		64,089		132,311		139,796		131,699		128,952
Total Arkansas		114,269		175,422		180,880		170,497		171,451

TOTAL BOK FINANCIAL	$	34,480,705	$	36,415,915	$	38,618,918	$	39,425,951	$	41,242,059

NET INTEREST MARGIN TREND -- UNAUDITED

BOK FINANCIAL CORPORATION

	Three Months Ended
	Dec. 31, 2022		Sep. 30, 2022		June 30, 2022		Mar. 31, 2022		Dec. 31, 2021

TAX-EQUIVALENT ASSETS YIELDS
Interest-bearing cash and cash equivalents	4.06	%	1.87	%	0.83	%	0.18	%	0.16	%
Trading securities	3.70	%	2.72	%	2.00	%	1.71	%	1.89	%
Investment securities, net of allowance	1.46	%	1.42	%	2.35	%	5.07	%	4.99	%
Available for sale securities	2.54	%	2.21	%	1.84	%	1.77	%	1.72	%
Fair value option securities	4.40	%	2.98	%	2.92	%	2.81	%	2.71	%
Restricted equity securities	5.70	%	6.23	%	3.30	%	2.69	%	2.98	%
Residential mortgage loans held for sale	5.56