BOK FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 3, 2011

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8-K - BOK FINANCIAL CORP 8-K 2-1-2011 - BOK FINANCIAL CORPform8_k.htm
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Morgan Stanley Financials Conference
February 1-2, 2011
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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ü 21st largest U.S. based publicly traded bank
 holding company by asset size
ü Total Assets   $23.9B
ü Loans    $10.6B
ü Reserve for Loan Losses     2.89%
ü Deposits    $17.2B
ü Tangible Common Equity         9.21%
ü 2010 Net Income   $247MM
ü Market Cap on 1/26/11  $3.6B
Banking services provided by Bank of Oklahoma, Bank of Texas, Bank of Albuquerque, Bank
of Arkansas, Bank of Arizona, Colorado State Bank and Trust and Bank of Kansas City
BOK Financial at 12/31/10
Strong Markets, Superior Results
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Source: SNL, deposit data as of 6/30/10
Market Growth Opportunity
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Consistent Strategies
Proven to Deliver Solid Results Through All Cycles
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4 Strategic, Long-Term View
 4 Utilize a decision making framework based on long-term economic benefit
 4 Actively pursue talent acquisition
 4 Build the franchise through organic growth and disciplined acquisition strategies
4 Customer Focus
 4 Develop long-term relationships with commercial and retail customers
 4 Deliver diverse fee-based services in a personalized responsive manner
 4 Offer innovative and value-added products and services
4 Balance Sheet Management
 4 Originate quality loans while maintaining a consistent mix in the portfolio
 4 Prudently manage risk and control expenses in relation to revenue growth
 4 Remain relatively neutral to interest rate changes
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Source: SNL Financial
EPS have been restated for stock dividends and for a 2-for-1 split
EPS CAGR: 13%
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Earnings History
Outperform Through Economic Cycles
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Net Interest Revenue = 58% of Total Revenue
 
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Other Operating Revenue =
42% of Total Revenue
Deposit Service Charges 8%
Transaction Card                       9%
Brokerage & Trading                                             8%
Mortgage Banking                                             7%
Trust Fees                                            6%
Other                                                                                         4%
Components of 2010 Revenue
Fee Revenue Consistently Exceeds 40% of Total Revenue
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Note: Peers are defined as 20 US publicly traded banks, 10 immediately larger and 10 immediately smaller as
measured by total assets at 12/31/10. Source: SNL Results are preliminary as one peer had not yet reported.
 BOKF
Peer Median
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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2010 Results
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Diluted Earnings Per Share
Record Earnings
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4 Record earnings of $246.8 million or $3.61
 per diluted share, up 23% over 2009
4 Net interest revenue totaled $709 million,
 down $1.3 million from 2009; Net interest
 margin declined during 2H10 due to a decline
 in the yield on the securities portfolio
4 Fees and commissions increased $36 million
 over 2009 bolstered by mortgage banking
 revenue and brokerage & trading revenue
4 Prudent expense management: personnel
 increased 5.6% & non-personnel expenses
 increased 8.1% excluding the change in the
 fair value of the MSR asset
4 Credit quality continues to improve; net
 charge-offs declined $33 million compared to
 2009; non-accruing loans declined $109
 million or 32%
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
4 NIM decline primarily due to lower
 securities yield resulting from
 accelerated premium amortization
 and lower reinvestment rates
4 Loans declined slightly as runoff
 continued to outpace loan demand
4 Credit quality continued to improve
 and we lowered the provision for
 loan losses for the fifth
 consecutive quarter
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Fourth Quarter Financial Results
($ in Millions)
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Select Components of NIM:
Net Interest Margin
Low Rates in 2H10 Pressured NIM
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Other Operating Revenue
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Mortgage
Banking
Among the rules pending are uniform lending and
servicing standards; consumer protection measures; and
several reforms affecting loan originators
Based on the $0.12 cap proposed in December, our
interchange revenue would decline $12MM-$15MM in
2011; rules will go into effect July 21, 2011
There is still no leader of the Bureau of Consumer
Financial Protection; the Bureau will have authority over
banks greater than $10 billion in assets
BOKF will be affected by other aspects of Dodd-Frank
including new capital rules, FDIC revised assessments,
and potentially the swap push-out rules
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Consumer
Products
Bank wide revenue initiative in 2010 identified opportunities expected to generate
additional revenue to offset the potential reduction from financial reform
Interchange
Other
Revenue At Risk
Financial Reform
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Expense Management
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Loans and Credit Quality
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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 Consistent Portfolio Mix
 C&I  56%
 CRE  21%
 Resi  17%
 Consumer  6%
 Regional Diversity
 OK  46%
 TX  28%
 NM   7%
 CO   7%
 AZ   5%
 KS/MO       4%
 AR   3%
$10.6 Billion Loan Portfolio
Diversified by Sector and Geography
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
2010 Average Loan Trends
($305)
($395)
($216)
($110)
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($194)
Continued soft loan demand through 4Q
4 C&I: Declines in energy, services and
 manufacturing; recent growth in
 integrated food service and healthcare
4 CRE: C&D loans declined $197 million
 in 2010; recent growth in multifamily
4 Residential Mortgage: Home equity
 loans continue to grow moderately;
 partially offsetting decline in permanent
 mortgage
4 Consumer: Indirect auto loans
 declined $215 million in 2010 due to
 our decision to exit the LOB in early
 2009
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Energy Portfolio
Core Competency
4 52% of the energy portfolio is
 attributed to OK, 36% to TX and 12% to
 CO
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Based on committed amounts at 12/31/10
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4 193 SNCs at 12/31/10 with $3.6
 billion committed and $1.4 billion
 outstanding (13% of loan portfolio)
4 Committed amounts increased $207
 million during 4Q
4 88% of outstanding dollars are
 attributed to relationships in local
 markets
4 5 relationships were on non-accrual
 at 12/31 with balances totaling $9.7
 million or 0.7% of total outstanding
 SNCs
Shared National Credit
Relationships
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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CRE Portfolio Changes
Reduced C&D Exposure $197MM in 2010
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
 Outstanding principal of community development loans sold with
 recourse declined $42 million during 2010 to $289 million
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BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Source: SNL
Nonperforming Assets ($ in millions)
Reduce Level But Maximize Total Return
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Nonaccruing Loans
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
2010 NCOs to Average Loans in Basis Points:
C&I CRE  Resi  Consumer Total Loans
30 238 106 145  95
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Net Charge-Offs $ in millions
Consistently Below Peers’ During the Recession
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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 $141MM OREO
 AZ  32%
 TX  26%
 OK  18%*
 CO         8%
 NM         6%
 KS/MO   5%
 AR         5%
* Includes $12MM equity interest in post-
bankrupt company
4 Approx. half of the 1-4 Family
 homes are in Texas and Oklahoma
4 Generally sell homes within 1 year;
 will reduce listing price (and book
 value) if property is not moving
4 May retain quality developed CRE
 to maximize return
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Balance Sheet Management
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
High Quality
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4 No securities backed by sub-prime mortgages, collateralized debt obligations or collateralized
 commercial real estate loans
4 At December 31, the estimated duration of the MBS portfolio was 2.2 years; duration would
 extend to 3.5 years with a 300 basis point increase in rates
* Includes $428 million in securities purchased to hedge the MSR Asset
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Net Interest Revenue
Source: SNL data as of 1/27/11. One peer had not yet reported.
4 BOKF’s ALM philosophy
 produces a more stable
 long term net interest
 margin through varying
 interest rate cycles
4 Growth in deposits and
 securities has mitigated
 the NIR impact of the
 decline in loans since
 2008
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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4 Low rates during 2H10
 increased prepayment
 speeds on MBS which
 reduced yields through
 purchase premium
 amortization and
 reinvestment rates
4 Recent 100bp curve
 steepening should support
 a partial recovery of
 security yields and net
 interest margin
Recent NIM Trends
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Interest Rate Risk Position
Portfolio is our Primary Rate Risk Management Instrument
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4 Securities portfolio offsets asset
 sensitive core balance sheet
 4 Majority of loans are floating
 4 Core deposits provide stable-rate
 funding
 4 Securities balance the rate risk
 position
4 Very low term interest rates in
 early Q4 increased prepayment
 speeds shortening portfolio
 duration
4 Normal asset duration returning
 with Dec 2010 curve steepening
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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4 OTTI expense of $6.3 million in 4Q
 4Increased default severity assumptions
 4Slowed prepayment speed assumptions with curve steepening
4 Majority of loss content is in the $205 million of Below Investment Grade
 ALT A portfolio
Other Than Temporary Impairment on
Debt Securities
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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4 Consumer & Wealth Management account for ~60% of total deposits
4 #1 market share in OK, #4 in Albuquerque; deposits outside OK have grown at
 a 9% CAGR over the last 5 years
4 62% loan to deposit ratio
25%
54%
20%
Deposits
Dominated by Core Deposit Relationships
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Regulatory:
Non-GAAP Measures:
Capital
Strong without TARP or Dilutive Stock Issuance
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Capital Strength
4 12.69% Tier 1
4 9.21% TCE
4 Considerable excess capital
 above proposed Basel III
 thresholds
Capital Deployment
4 Organic growth
4 Capacity to fund acquisitions
 without additional debt or equity
4 Stock repurchases
4 Dividends
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Looking Ahead
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
2011 Strategic Focus
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1. Restore high quality, profitable loan growth
2. Generate additional fee revenue in all markets
3. Control expense growth in relation to revenue growth
4. Seek growth through pro-active approach to traditional bank and
 fee business acquisitions
5. Maintain positive trends in credit quality
6. Generate revenue to replace the reduction from Financial Reform
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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Maintaining Shareholder Value
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
Q & A
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Steven E. Nell, EVP & Chief Financial Officer
Charles E. Cotter, EVP & Chief Credit Officer
Marty Grunst, SVP & Treasurer
 
 
 
BOK Financial Corporation. Member FDIC. Equal Housing Lender.
Services provided by BOKF, NA doing business as Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas, Colorado State Bank and Trust.
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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, and the economy
generally. Words such as “anticipates”, “believes”, “estimates”, “expects”, “forecasts”,
“plans”, “projects”, 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 involve judgments as to
future events and are inherently forward-looking statements. Assessments that BOK
Financial’s acquisitions and other 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 BOKF has not independently verified. These 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 expressed, implied or forecasted in such forward-looking statements.
Internal and external factors that might cause such a difference include, but are not
limited to, (1) the ability to fully realize expected cost savings from mergers within the
expected time frames, (2) the ability of other companies on which BOKF relies to
provide goods and services in a timely and accurate manner, (3) changes in interest
rates and interest rate relationships, (4) demand for products and services, (5) the
degree of competition by traditional and non-traditional competitors, (6) changes in
banking regulations, tax laws, prices, levies, and assessments, (7) the impact of
technological advances, and (8) 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.
 
 
 

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