BOK Financial Reports $55 Million First Quarter Earnings

Business Wire, April 29, 2009

Average earning assets for the first quarter of 2009 increased $477 million compared to the previous quarter, primarily due to a $447 million increase in average securities. Average outstanding loans decreased $42 million due primarily to lower outstanding commercial loan balances. Residential mortgage loans held for sale increased $80 million due to refinancing activity.

“A special focus has been placed on growing deposits to enhance our strong liquidity position,” said Lybarger. “We have succeeded in growing deposits while, at the same time, reducing deposit costs.”

Average deposits increased $756 million compared with the fourth quarter of 2008, including a $494 million increase in average interest-bearing transaction accounts, a $152 million increase in average demand deposits, and a $106 million increase in average time deposits. Average funds purchased, repurchase agreements and other borrowed funds decreased $361 million from the fourth quarter of 2008.

Fees and Commission Revenue

Fees and commissions revenue totaled $121.5 million for the first quarter of 2009, $110.6 million for the fourth quarter of 2008 and $113.9 million for the first quarter of 2008. The $10.9 million increase in fees and commissions revenue from the previous quarter was primarily due to an $11.3 million increase in mortgage banking revenue. Mortgage loan originations increased $494 million due to government initiatives to lower national mortgage interest rates. Decreases in trust revenue and deposits fees were largely offset by growth in brokerage and trading revenue.

Operating Expenses

Operating expenses totaled $165.8 million for the first quarter of 2009, down $19.6 million from the preceding quarter. Excluding changes in the fair value of mortgage servicing rights, operating expense increased $8.7 million over the fourth quarter of 2008. Personnel expenses increased $4.9 million over the fourth quarter of 2008 primarily due to seasonal increases in payroll taxes and other employee benefit costs. In addition, the Company experienced an increase of $2.4 million over the previous quarter due to higher FDIC insurance premiums, $2.5 million increase in mortgage banking expenses and $800 thousand increase in net losses and operating expenses related to repossessed assets.

Credit Quality

Non-performing assets continued to increase during the first quarter of 2009. “We are continuing to work closely with borrowers adversely affected by the recession and expect those efforts to remain a major focus throughout the balance of the year,” Lybarger said. “We have no plans to liquidate non-performing assets at depressed prices and will selectively retain assets to maximize value.”

Non-performing assets totaled $414 million or 3.26% of outstanding loans and repossessed assets at March 31, 2009, up $72 million since December 31, 2008. Non-performing assets included $11 million of restructured residential mortgage loans guaranteed by agencies of the U.S. government and $11 million of other loans guaranteed by cash escrow funds. Non-accruing energy loans included $47 million that represents approximately one-third of the pre-bankruptcy amount due from a single borrower.