BOKF BOK Financial

Steven Nell Executive Vice President, Chief Financial Officer
Steve Bradshaw President and Chief Executive Officer
Stacy Kymes Executive Vice President, Corporate Banking
Marc Maun Executive Vice President, Chief Credit Officer
Scott Grauer Executive Vice President, Wealth Management
Ken Zerbe Morgan Stanley
Brett Rabatin Piper Jaffray
Peter Winter Wedbush Securities
Jennifer Demba SunTrust Robinson Humphrey
Matt Olney Stephens
Jared Shaw Wells Fargo
Gary Tenner DA Davidson
Jon Arfstrom RBC Capital Markets
Call transcript
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[Call starts Abruptly]… It is now my pleasure to introduce your host, Steven Nell, Chief Financial Officer. Thank you.

You may begin.

Steven Nell

Good morning and thanks for joining us. Today our CEO, Steve Bradshaw will provide opening comments; and Stacy Kymes, Executive Vice President of Corporate Banking will cover our loan portfolio and credit metrics. details and income the provide some the items fourth provide quarter third high-level then regarding statement our for quarter. I'll guidance for

implementation as end Officer provide at CECL. We Vice and presentation you have for this Chief President I'll questions. a Credit we Management; of available our Executive Executive quarter regarding release on website Additionally, as are the make Vice at Wealth it any disclaimers well and PDFs the range Scott Grauer, At third Maun, available the of the as pertains the of call Marc we'll expectations of refer press to slide during X forward-looking of Slide call. to President statements

to over I'll the Steve now call Bradshaw. turn

Steve Bradshaw

thanks third us morning, for results. financial the XXXX discuss to quarter joining Good

results second Despite outstanding pleased from both per net BOK are report efforts We challenging unique to only to entire Financial mix some of record business industry team. a share quarter for revenue, an the BOK of Financial, consecutive these but to the income are earnings perspective. testament organization and the not a a headwinds,

Slide X, or per from net of upward factors. The ago. its trajectory share, driven a income third was was by $X from X% and Fee $XXX.X nearly number continued X%. the key quarter that's million up up this quarter revenue year a quarter diluted previous and XX% on same Shown quarter, the expanding quarter-over-quarter commission growth

impacted mortgage rates momentarily. volatility. fully on to detail and income pressure loan mortgage-backed offset trading net market and will in trading mortgage lower This net outperform revenues margin and interest both on volumes the cover brokerage interest mortgage that strong increased and growth realized continue Steven Our banking interest and production securities by

consistent to businesses. mostly was to in this operating compensation minimal increase higher a fee-based quarter attributable total management with related Expense expenses, our

influenced was This growth. higher was by at $XX loss level loan slightly provision this quarter continued Our million. loan

Pay open been which in as growth quarter loan invest back emphasis our see will BOKF fund has of the in $XX.X nearly favorable Kymes a more remarks, detail. X, you of deposits finance with in the bearing saw opportunity bought relatively growth the manufacturing an downs the left we up at BOKF, loans and prepared a $XX.XX I'll company an we to results provide results. XXX,XXX loan area Slide period per significant end along remain for the to over deposits. over remainder increase deposits were in average of but X% loans in and public quarter were the And in shares single-digit year. market. Turning the sales end this deposits can now conclusion up Average loan late on mid the we billion, quarter. price review further and loan Growing the at X% for for increase flat, X% in significant perspective Stacy now but with quarter, portfolio of additional the interest in segments period at share confident our were a to credit this

turn I'll to call the over Stacy.

Stacy Kymes

Steve. Thanks,

Total As $XX.X million on on up were $XX for can quarter. loans C&I Slide the the period-end up total for you billion, a see quarter X.X% basis. X, was

environment. the or responsible energy in for we've continues to be normal growth. X% nearly healthcare the sell $XXX million Energy in for slower churn driving C&I the up bulk be continue quarter. and The was to market was energy current continues, expertise Our as companies portfolio the discussed trend of lower to the factor the in and divest than or

lending class. segment ability credit and Our to properly underwrite energy manage in energy through affirms cycle, our proven history this the last the

well public focus relationships pay growth manufacturing a focus downs C&I space segments. in refinement time the some large in mentioned while low we Our the finance healthcare in healthcare the rate finance due growth segment commitment or at by and quarter, as as strength a in segment steady last margins client channel downs us housing this was significant not at grew healthcare offset energy acquisition impacted lending preserved intentional $XXX of senior major an this in to our quarter as engine. period-end CoBiz the growth Public other X.X%, area pay the the of million point today. and as levels in and of continued this is for This

with in the concentration in and down segment customer through the we strong is coupled very for this space to still X.X% the pay portfolio. Continued downs will we commercial estate volume quarter grade quarter. high stringent real limits late continue and discipline reload as selection at left this Commitment

but and performing information primarily remained X, and offset by loans quality as down Non-accruals during quarter loans. commercial healthcare credit Slide to Potential basis problem retail the historical XXth, this This trend. On in was XXXX. to other XX can healthcare that downturn at in you wholesale sector defined September other sector this at a which due XXth. million commercial million were in due perform, points concern $XX decrease $XX a June remaining all decline $XXX to energy based that increase management continue did and loans. increase decrease services million to strong Energy see to a the million slightly a and partially caused in loan Net today. the an $XX We to not up it $XXX as down million $XX our industrial do few as below loans, are to and on borrower's the or moved has ability totaled loans charge-offs largely energy, industrial loans, well year. from sector portfolio in known stress due quarter, any was lingering by new energy see non-accruals million on credits from

and net appropriately charge-offs, XXXX. of of that in credit for and and for end appropriate loans combined provision leases. determined potential with Company $XX allowance period X.XX% of loans the overall factors, reserved million the on an We credit including Based evaluation a remain the growth, quarter was of problem third all loan losses changes non-occurring

I'll more the Steven? to over to the in Steven Nell detail. statement cover call income turn

Steven Nell

Thanks, Stacy.

was Normalizing quarter. from Interest million million Slide impacting items second to I items, roll Net income a revenue relatively the margin on highlight interest the $X.X the on the XX significant down was net $XXX forward previous for noted X.XX% slide, second accretion. flat. and recovery X.XX% the these $X.X interest NIM calculations. of provided of As was Comparatively, quarter net quarter. $X.X interest from for million, quarter down included higher million more

higher the and by points the in NIM First, points accretion X recoveries basis basis interest levels impacted second X respectively. and quarter

of expansion mortgage-backed dilutive on income had NIM Second, our fixed net effect the interest securities X basis of income. to a XXX,XXX $X.X portfolio added points. billion But

of deposit environment. X lower gathering servicing an to in interest off higher held declined is activities of -- The largely by points. priced our Loan deposit mortgage points hedge rate interest basis diluted Additionally, securities points yields partially X bearing a to increased additional LIBOR, the a in of XX difference points. cost basis pricing higher basis rights, level carryover attributable overall NIM remaining X basis

significant interest rate to working cuts to defend pressure. continue will interest provide income, net While are we

to repossessed The $XXX increase for continue an with on coupled mortgage-backed loan as the Slide increase higher high mortgage the million, of mortgage. interest Lower lower security rates was properties operating mortgage business in we in repossessed activity. The increase Brokerage sale certain increase and is the drove quarterly Other in nearly and trading quarter, and results, due for rates a year-over-year this credit. On rates margins in a by Gain earned X these to increased second properties. set and trends up one-time continuing on related XX, insurance down revenue third oil the X% quarter. X% gas a is asset in collected a an were strong The fees commissions was refinance quarter. wealth quarter trading last in strength revenues mortgage up volumes. revenues a interest higher activity revenue triggered to of quarter. fees by from due declining offset the quarter, XXXX. revenue large to of a Management points tax by seasonal largely figure impacted syndication fee accelerate, increased in over expenses management to mentioned and revenue asset X% and and fueled increased X-year led basis Asset Fiduciary

leverage. Slide to carefully operating continue manage drive XX, Turning to we to expenses

incentive primarily was $X.X efficiency compensation Commercial sales to and decrease million in million million. increased This due expense by able compensation seasonal partially was were offset employee Incentive quarter. in compensation Employee related sub million $X Banking. Total operating over an we to fact, $X.X a increase Wealth million, the ratio up $X.X increased the largely payroll regular by in the decrease benefits were in in $XXX and activity this $X.X quarter. Personnel increase cash-based benefits by taxes. expense incentive to increased million, down compensation by Management second XX% expenses led maintain previous for the In quarter.

increased Non-personnel expense primarily an certain an was lower banking rates rights servicing speeds. due $X.X with increase amortization drive quarter to increase overall flat offsetting prepayment in as in million, mortgage from components. interest of Mortgage the cost second

with thing and $X.X losses and project. expense expense to promotion business tax million. CoBiz BOK increased a and along decreased assets million. of processing I'll quarter benefit, additional addition, million the million mention net communications In tax completion Financial the largely repossessed and One credit expense data tax the due return is, $X.X of for $X.X million increased finalization on Insurance $X.X decreased expenses included $X.X XXXX and this

for Slide the XX has our XXXX. outlook of remainder current

influenced expected any that As is rate years, But, placed expected discussing flat further say, categories saw loan centered level will for rate year initial for on opposed has net we as along. The mid in growth until income think in C&I by hold I've any year. interest next remainder quarter fourth fourth Provision to focusing interest of more around quarter, budgeting pressure our and in clearly growth off the I on last cut deterioration. single-digit on a was negative will in however, September process I'll our be we margin. environment loan for the the net credit done planning previous the is detail XXXX.

pressure that the additional on cut depend to We with. quarters on so last timing We've increased year-end, NII also securities portfolio before rate couple a will cut. level fixed income the comfortable another NIM of our we're and that of expect in

would relatively expect flat. I So it to remain

to Revenue rates. businesses, from to from continue and mortgage, benefit particularly and fee-generating trading lower brokerage interest

could seasonality activity. influence However, mortgage

largely below mix. to our dependent ability total revenue efficiency at hold Our or XX% ratio and revenue is

improve to to slightly over organic opportunistic to share sufficient and support level Capital modest are growth will loan of capital allocate We expect expected repurchases. time. continue ratios a

XX And Slide lastly, on on a CECL. word

We project. completion of implementation our are nearing CECL

models been and have finalized. validation being Our developed is

on We consider have committee These of developed established not forecast Based million. runs, an between process. the and runs be runs qualitative the $XX our adjustment these allowance loan the models. million measured test adjustments seasonal implementation completed data transition the CECL from internal the for and exposure results pre-tax the of $XX systems, will economic valuation results appropriately the expect several credit by committee committee, by test from our modeling economic forecast of and test

on accrual that duplicate our of loan in including to for disclosures, discount. marked loans a are of allowance acquired considers $X.X Mae credit exposure the Ginnie Affairs. adjustment And provide previously the to an value, provided by previous for billion were on serviced credit $X the nearly Department billion that fair of to backed requirement As approximately provide transition Veterans

forecasted January our of conditions portfolios depend of final composition the date economic the the transition for adjustment Xst, CECL course and and current adoption. loan XXXX, effective the as Of will on the

the I'll back commentary. call Steve to for Bradshaw now turn closing over

Steve Bradshaw

Thanks, Steven.

second mentioned potential of interest As income cycles. for than that our a in fee consistently a consecutive call, top the this the compensated This quarter, at underscores is rate the economic quarter quarter which business is through our the perform is full product Company. and built approach discipline structured of is interest bank net really to more decrease revenue how of Financials' we our BOK I earnings have record

With ahead, the help we're fee rates that in Looking revenue well intensify. is the derived our mitigate of if from performance continue ability XX% headwinds I we our believe have for positioned business, continued decline spread fall. even really to revenue to industry if

growth. real us the outpace So quarter loan leave this and our loan end continue continued period growth story, tell impression average give flat to might was and that growth optimistic for quarter, while loan the growth is pay late while slowing, expectations healthcare loan downs channels energy

pleased we're that, to with take your So questions, operator?

Thank Instructions]. you. [Operator

first Zerbe ahead. question Ken is from Stanley. Our Morgan go coming of Please

Ken Zerbe

a do projects investments on the you in having the the much figure weaker XX% delay guidance, if or out steady the any given at expense the ratio, are revenue of state? efficiency to feel guys business terms to you're trying just how we good expense that outlook? In or kind I'm pressures side,

Steven Nell

Ken, are coming state. we this at big us really see at think XXXX. is, Steven. good Yes, I I steady don't bubble of expenses a in

it's as think usual. more business I

think that's our efficiency I revenue mix. really I the the determined why so made more revenue comment about and ratio around And being side

As pretty are I state. think expenses the steady

Steve Bradshaw

Bradshaw tag that. me let to Yes, this on is Steve

maintaining of a that allocation expense think some we big part technology in headwinds. and our level, the obviously revenue I to investment face are of is that even

in revenue. investments of rolling off. that back So also And of technology and of 'XX we now that pretty a made seeing we're percentage kind some infrastructure significant we 'XX timeframe in are think really as

So more focus to our resources enhancements. that's product customer-facing technology us giving more and on capacity it's

despite good out So we feel about headwinds the there. that

Ken Zerbe

Steven, get NIM then fourth in do And the happens quarter. cut, an envision we do what to you if rate October

Steve Bradshaw

go to down Continues ….

Ken Zerbe

Can that specifically? quantify you

Steve Bradshaw

for it's really faster lockstep as are calculation that will because Then funding with funding with pricing to move to of move wholesale anyone. that's with But the pretty our our hard and Fed kind securities so there's of Well clearly at that the pace. moving portfolio down a roll any the loans. deposit down much quantify the me NIM loans continue just parts lots LIBOR-based impact to going --

from it that fact spread, You larger we get will have securities that hold actually portfolio gained income fixed some it's spread. the benefit

we rollover the in seeing activity said and the I last administered that deposit consumer. are really and our quarter, As wildcard is here would gathering pricing some I say

our wealth -- overall long continue pricing a We as based downward and stable, interest-bearing type growth are commercial. deposit deposits, with stay that costs then we market exception movement perhaps fund But not if going seeing our loan some in to higher. more to relatively you're as little see

Ken Zerbe

last this right this staying interest And and get down, the question. for my What's accretion PAA? level just maybe Because then with heard Thanks. I but accretion? obviously for of you also and right you recoveries recoveries expect quarter. is comes just NIM, of I what interest do the level

Steve Bradshaw

usually was the level in somewhere a so level me, $X.X in and in recoveries interest the $XXX,XXX, quarter, hard it then Interest quarter. have -- were the some it's quarter, only recovery of third the or $XXX second elevated. I million excuse say. million level in It's was it And $X between, that to million accretion second you bit saw think in we

that. a over the goes on about bit overall will million is there'll have amount to we more as discount time the a quarter in in and recovered $XX and This be tail still normal years by, time left over next that three two be little

enter down that So million begin $X quarter saw pinpoint taper XXXX. you we to will that as this


you. Thank

ahead. of Rabatin Brett from coming Piper is question Jaffray. next Our Please go

Brett Rabatin

you there various estate mid-single expected expect real the kind to about loan balance? C&I you mute the you the maybe little and to category you and categories remainder of more Can or payoffs color of loan for us loan from if can the total growth on a give see impacting how the additional about is growth I the talk growth guidance is digit versus that wanted commercial ask year.

Steve Bradshaw

in opportunities in capacity see got comfortable that's We've from for range real we had Yes, the at that even basis we'll a still have impacted some that. comfortable grow the what there. market the continue growth-- real outstanding estate I I think digit mid-single total portfolio. categories. we've kind we versus growth. would mean years kind a and driving estate, in loans estate, Obviously, the but -- normal I anything of almost we've estate don't which it's late inside for with -- to very when now, that hard perspective payoff of third of speaking, pay advance feel just loans I in that when timing they a on about feel down a impetus end to to downs year seen of we generally quarter, very year-to-year market predict mean, portfolio past, real real individual total we talked pay

think may think broader think forward, talked I I look kind you an the organically election go look space as in the I cycle have banking markets business through we've you some you C&I as you as in that. the last work of you just -- -- as in uncertainty quarter, the headwind in and through space around

to favor of are portfolio, But trepidation Healthcare Energy, going I in think uncertainties our modest got think, that opportunities drivers a borrower CRE got and continue kind to levers. of a creates I that of to the grow. never what's we've We've happen that the have to the big got part perspective. at we've sometimes been overall a overall. places see on from us. pace and lot other for create portfolio good will grow in

about we've still of that we that talking feel mid-single digit loan kind good growth So annualized about. been

Brett Rabatin

you second. Okay. that to energy, for then talk about a And mentioned wanted

anything mentioned the new I'm and of not few reserve moved you your but more change your you that's given in have how no debt versus curious, have how you had versus growing based. energy curious, really the guys you flow ones. cash issues, service You to portfolio, environment? a terms kind you're I'm industry changed underwriting of you lingering the adjusted do

Steve Bradshaw

a this are Every cash has ever energy I that that, component had cash style, at more we've heard flow-based and of a underwritten flow -- moving and that. underwriting to I've bank loan people to understand that. don't underwriting

asset-based flow repayment repayment underwriting, outperformed may this flow cash why I but underwriting looked we've collateral. that, the this that's And maybe here the as we're at segment. it without strictly bank of this we Base debt and making I a which us. this part asset in to how as has asset why class, underwritten you all core can't source. at repayment loan never market I can of history an to have be debt, tell against our looking cash been of speak for have my in the a others cash bank, flow never we at think And so that's base loan as class But

we result performed has consistent We haven't underwriting made make our changes that. of has to a to the and because as changes underwriting not and cycles through had been have

Brett Rabatin

one I And sneak last one can Okay. if in.

back margin of parts. Would income? the on lot here, about thinking be you there's know Just from down question, I various a of NII moving the expect pieces just to the

Steven Nell

the to if in get slightly, yes. be loans. one LIBOR-based because NII quarter, we impact Brad, largely on the we I our which decline would then rate of we're expect would expecting, say fourth more That down

goes We that will if a fourth helps, grow in loans, down certainly see I but scenario the another certainly NII rate decline. can where quarter we get and

planning. Now, if we're

flat I loans, and I in the continue in another think feel I in fourth but we we're mentioned there planning grow going environment, XXXX certainly to pressure rate. XXXX grow NII, if to rate that we're a holds quarter with


Thank you.

next go coming ahead. question Securities. is Wedbush Our Please of Winter Peter from

Peter Winter

in terms and just Just what have going if in guess of maybe a has you there energy, second wondering can is been I'm reserves potential where size against you're loans a thinking future increase I charges? the this quarter back these to about you non-performing talk loans. decent

Steve Bradshaw

'XX, in we've liked downturn Yes, market the is of totality available we discussion did talked because -- never because all energy about the energy around losses kind in of that the to not. of reserve midst specifically, 'XX the or the reserve I for the think whether broader the

energy, for trying a kind to big So got a and disclose available loans. into our not specific we've reserved all we're it's of of because reserve back

I what those virtue and say by wells larger. things energy type would think of of loans are I how is drilled are

from non-performing there to of and be of loans. And that through as better, have then bad there is classified so it too they lumpy will the perspective lumpiness well. size the because That's as good the on when get you comes the going and have as there will one you're criticized, be lumpiness deteriorate, ultimately side deteriorate, they more

basis that's about talk From last we of loss average the over on place basis that we've a our you, perspective, five we XX, points tell the in points through a when quality of that basis presentation I quarters. pack kind would average been good of that about kind I to around And and certainly cycle, view it. better kind XX perspective. think And of look from slide at than credit is charge-offs charge-offs forward, XX point as of XX, XX a

that we can that that better the that know run we that's that from that rate it's and loss that credit today, think perspective. historical facts average even on though the to than know one -- stay we today is I I based deals think our circumstances long-term -- a on trajectory, continue

Peter Winter

obviously a I look If long very we have continue gives to kind space, the a in Great. a what equity confidence picture pull you way wondering in big of in energy. kind kind of back the question, you this when out, grow ask, area? could you're type really from of private just to I'm seeing strong history and

Steve Bradshaw

occurred. proved that over biggest future those come what to And time is you has the already with believe issue and repay debt developed production, time. out for we cash underwriting we're and flow are very from will think our investments has our proven been our on really the about private that base activity, over for wells comfortable lending here is, those not think equity I if

investments we're repay now. and capital down, have commodity on every an see the but to production there broader you to coming I in frankly well capital impact private new broader, the private an -- the growth much kind complex kind see down really those around markets equity capital be the future almost or issues, our stack future of of rig When debt. counts coming is more statistics growth equity supply, think going month that's closed, energy counting about not investment. can open you the issue with being and How the issues markets on

we are on of review, our Back in repay to the underwrite the kind cash to flow that we wells counting the existing early debt.

they've make underwrite think there an of loans no borrower improve future deal. conclusion, based investment logical approve to future cash And times Even existing it a there asset investment, that's drilling going and so our the -- no to if then us We it's on and let's that we loan and when that look play on loans, don't kind we that I flow not We these a changes is pay base loans. lot investment, future is a maybe back. is too made, accounting at commitments if We of for of kind repay that. of there maybe dependent no of private and that upon our and depletes loans the on private on a repaid look open term commitments. out. bail or that, equity to these at understand counting to markets they get over become we're equity energy lot equity not them as credit not We're an asset give we're capital But the to unfunded counting but private lending time. we energy us


you. Thank

coming Robinson Demba ahead. Jennifer SunTrust question Please of next Our is go from Humphrey.

Jennifer Demba

Question business. mortgage on the

we is XQ? Just how of usually much what in saw are the wonder your and now over bleed will strong XQ right pipelines how to strength softer

Steven Nell

get that originations. slowdown I'll the into generally -- mortgage time, tell it's in the pipelines Yes, generally there, and I just you fourth see mean in softer. when that that think holidays we I is good you a that you business, quarter but have seasonality

in very think is environment see though some for mortgage the you'll business. So seasonality just do conducive still activity, largely that normal slowdown good the from even I

Steve Bradshaw

Yes, this is Steve.

rates there refi see levels thesis I further higher the think see only decline the, would mortgage could suggest be that that out. coming you if mitigate a in is then will you

I rate XX% think and further approaching we were that in kind a could of go third market. higher refi in quarter, decline see the for us

be, lending with typically agree quarter. go Steven, would in you -- see would down that So purchase I the fourth purchase

to You of see relative a business year, the bit a but every wildcard virtually is little refi rates. that

Jennifer Demba

color was rest the your you some Stacy, lending of us tranche credit, Okay. Can on And before if great total kind near-term Question BOK? your like looks on any you now? leverage what in have some that on color right book for give charge-offs. thoughts guys portfolio, C&I on

Stacy Kymes

Maun, I'll is let Marc handle I'll Credit him here, let Chief Officer our that.

Marc Maun

standpoint enterprise focus lending the on that not that from value leverage in terms defining as type is of lending. of Yes, something we it

I the repaid We of of to on have us collateral of the value support call pure, from based a what would very get basis. a limited company amount

So that's not that maintained a process that -- line And strategy focus of forward. business on. we've we going

restaurant had business. the side, have On a limited amount we of

$XXX million on invested that brands franchise anything basically credits. that select -- select It's very in franchise based have are on We outstanding in we a We a isn't basis. don't do concept.

of And are we or So the companies. there that number the positive. all particular that and one, quality have -- franchise right now, ones larger tend brand. The credit number frankly is to X number X companies that for

Stacy Kymes

an been area never of focus. development that's Jennifer, business

philosophy, of cash Just both kind flow. from always suspenders belt we'd like and and a credit collateral

business or have so grow to develop never with And set strategy in that space. we a out that

Jennifer Demba


kind of as portfolio what the you credit, time? terms over in with on of question total loans you more progress one comfortable concentration healthcare to Just are

Marc Maun

We what's continue in the Well, evaluate that at industry. We six look with us. to we what's at months. look for and every the on works going going assess best regulatory what on environment

because demographics, us out-of-network We area businesses the on in our and time healthcare. type modified in housing of the opposed to the over really as have some favor the senior focus strategy that more

to there what in it We're -- reimbursement going Medicare/Medicaid with model. is more line we're So where comfortable a have. we keep much

focused concentrations energy. have on We

those our over loans. We and are over keep on of XX% a CRE, of time. we focused -- that for kind total have And which in focused line we care, accounted little on will ratios

Stacy Kymes

you, Marc tell committee So, concentration highlighted rate X% I that we the of are the been range healthcare continue capacity ones to Jennifer, would to forward. limit What in monitor the perspective. grow we that I the look that and Board we've those healthcare from a of XX% growing three areas as credit at to plenty think have


you. Thank

go Please ahead. is question next of coming Our from Olney Stephens. Matt

Matt Olney

Can How that influence Wanted about trading specifically then from brokerage of securities of volatility? much influenced of that by just quarter-to-quarter? that and remind rate can beyond are could ask that line. brokerage the the other to from income mix us the line And fee of the line? trading and be you is some that, drivers what line

Scott Grauer


income Scott. and income we when to product volatility you interest are the of are is look being fixed obviously lines by mix, sensitive going Matt, this which on be impacted our fixed all rate So, at you know the in side, rates.

income component it our fixed So of XX% our of for our when you total at accounts about mix, taxable look revenue.

the side, we certificates XX% then securities to corporate treasuries combination category our etc. the stable of rest have income XX% about group the and largest municipals, On of is a fixed single mix our of mortgage-backed

So high to revenue of going rate total a sensitive. interest is be percentage fairly our

and products -- have been active well have on activity We our component risk financial management. trading related that's we hedging as in little derivatives. equity our other and But

Steven Nell

Steve. this have down that XX-Q the When Matt, specifically. we is comes breaks out, a table

All brokerage different line said. breaks down -- fact, businesses, along with and five the of it brokerage item but in categories fee and Scott all trading the in about what

week a at so. that you out or when in it look So can comes

Matt Olney

quarter have XQ about the perfect. be interest-bearing a talk how margin, Okay, on quarter will then for fourth third the confidence you in little interest-bearing you and were level? up and quarter, those the expectations that much third cost deposit below deposit can And bit the cost on specifically cost, your the

Steven Nell

Yes. type loan more space. mean those and having we going that wildcard the are rates a of cost to -- our coming pay side, above. I those Zerbe's our our to growth although bit lot again up. those new feel with exception decline new It's of here I expect the from raise deposit that deposit administered [XXX] deposits some of that index in when wealth some a are continue customers how gain is some the of rates And of but are And seeing we're much of towards we're of balances those I we're to like the our in out to deposits much going some new fund deposits. with rate. over on have some consumer and market rates also wealth the little priced commercial talked earlier, question didn't we Ken about

interest level up it could so that growth you composite, -- we average see on size of that the X.XX% bit about a wealth relative think to deposit costs the depending little actually and the in. And when the the it deposit bring bearing that of deposits you

So it's that's the -- wildcard.

Matt Olney

of we And on were the around flat XQ? -- side, that downs to imply period just it pay you you downs. downs noted saw the surprising this the end some you? from earlier, those really strong some saw growth that any that because balance quarter and that commentary of loan received pay the Was migrations, kind you loan in pay then can talk -- sheet as you growth the Does deposit

Steven Nell

in imbalances, the but of before million, it was few bit I with we surprising. the small but wasn't a away Yes, there really it mid-single go $XXX pay loan end away. little end confident of growth about think kind of that a think actually down. fact feel really the was categories that activity some digit, have mean that impacted that that that had quarter I less a terms that none saw migrated -- of of from. quarter, despite Stacy I saw talked the sale we we that We than We still there, period


Thank you.

coming is question Jared Fargo. of Wells Shaw from go next Please ahead. Our

Jared Shaw

our guess I I just wanted on to bit the conversation stay little a more. question, deposit

bearing or of the in deposits a incremental that decline at those up. quarter, cost costs, as categories, higher to maybe you understand it cost see maybe mix at expect of deposits because If categories within I going fourth transaction those the -- -- category? look but we should shift, look So that at deposits overall we of look interest went

If you look at up. time they deposit went costs,

You see we there, might incremental to decline being savings, up cost went by overall mix? quarter. look but more Should some impacted this at the they start the

Steven Nell

I think some of some you decline those see should deposit in cost categories.

the is rate that in or what new pull deposits. think here I we to trying deposits more type market I'm emphasize

in go new much stays is fourth so, bringing could trying to think declined? the figure and you that stable rate the fourth the in deposit quarter. slightly it feeling our our loan -- that's out, flat these some will increase higher deposits, rates slightly see that expect core wealth is costs actually even into on we down. find we that deposits or it the at composite Does type And that going wealth It's up. core My deposits in is market to consumer, come yeah, the the commercial growth if quarter or core we're that of will really before the in categories, space, what deposits rates we in fit in continue we

Jared Shaw

flat So, looking up? slightly costs ones that attained at Okay. being or that

Steven Nell

happen. That could

Steve Bradshaw

You seasonality quarter well. the with fourth as in some get also deposits

Jared Shaw


four Okay. And DDA? average DDA I down. as the of guess, balances you see bottoming Where quarters, the do last DDA average I then and when trickle we that could in over potentially the growth out see guess on we side, have look sort

Steven Nell

was average bit, so down little saw We some was to see but of I, growth balances. $XXX over point-to-point down in as million, go expectation point-to-point little and rates a a you stabilization our there some The growth continue that DDA. DDA for the like that, feel

Jared Shaw

I then, said to me this growth. you on And quarter, the The side. just guess the million $XX Okay. loan tied finally provision provision it's from

for expect see fourth loan sorry we in DDA provision quarter, we the then that average the similar that range? if million I'm growth So $XX -- stay should

Steve Bradshaw

first quarter, did charge-offs. Well, to that I cover third think in wanted the thing the the point I'll we we out

extra higher, overall little in net in were although recoveries. a second was we're bit charge-offs cover we to the a about. the that growth for with covered quarter then talking our lower little I quarter than less charge-offs bit the were And So But for that the wanted quarter, believe, we a $XX.X bit but gross charge-offs third million, and third actually little the provision. loan we had gross charge-offs

on on to related with credit what to and in more depending expected any growth opposed be feel happens depending quality. growth, as deterioration in there'll the fourth what on I the provision quarter to So influence happens like charge-offs net


Thank you.

Our next ahead. question is coming from Gary Tenner of DA go Davidson. Please

Gary Tenner

and flat if scenario quarter a you pressure had of the out, to plays -- year in of flat you leverage additional the sheet, and sheet of in laid in fourth a balance do the fourth fourth kind … terms adding support how Steven, then quarter I that more rates rate NII on one support in that quarter think balance or we about year environment, that next potential question assume next the margin out the to kind time the -- of

Steven Nell

added. the fixed above securities any $X.X $X.X was million. we really add know couple average have plans don't added additional up income billion. what already think Yes, actually I last we quarters I the to We've of

to answer for certainly So but you we when press the release, really either, to at fourth see think look to was I don't in quarter. add billion. you the see to question. going period I during balance change We're not $XX sale the available balance that sheet take that wouldn't end would away your position, much

Gary Tenner

that on just on Okay, is the thanks. clarify one? slide, million, $XX And that to the on you'd CECL your CECL? ALLL expect to is $XX delta then that that adjustment day million Is to

Steven Nell

loans overall pick to a items. be about VA and and then believe in and increase loans cover of $XX in to another XX% component of up the BOKF legacy our is implementation, I other that loans of about actually million, originated will relates that, which and about unfunded to acquired but liability of to represents There to XX% the million we that $XX of the kind XX% CECL XX% XX% X% will reserve, another that,

kind will they view on be sheet. that's up but a in the way of of it, show couple balance the there -- So different will we categories


Thank you.

Arfstrom Jon ahead. RBC Markets. go Capital Our next coming question is from of Please

Jon Arfstrom

are mortgage $XXX expected, Stacy, there. course still of finance have you couple pay questions, the the million public to I lending balances but A but want of in ask well, about as downs they

what the in trajectory is? longer curious plan term Just

Stacy Kymes

equity Yes, of lending a equity rate, return return in when the harder get current time margins is we kind we the flow return in on over way. business the on it's other equity on space, get for segment our it that ebb competitive of and not then we below there. in originate in with can as the and segment environment margins but development our and us that In business evaluate aggressive today's and a and large for kind that hurdle that so and to focus more a lower become favorable segments be then it's moves favorable

Jon Arfstrom


down, million your you're really decision So just not running is more conscious saying the it's $XXX on about part?

Stacy Kymes

and performed commentary the returns really equity in around all. extremely That's business, a -- is ebb we're a in decide of we perspective on asset not that really just From the business flow and in that's well. to the internal capital making class equity It's return on kind the the at our it on around origination, the impact out space credit new not how move allocation. move margins of and and

Jon Arfstrom

Okay. or give grading high the just it term is actual On maybe you of portfolio, us us is -- high you understand help are an the that, CRE, you And the growth? graded churn it? your expecting used in example portfolio. Can

Stacy Kymes

I expect modest growth look in CRE as forward. we

come there. way are two is it, differently, happened like there or days, ago. things CRE different out when that segment, that the had that our should asking good modest cases to we loans very about such we are keep thorough can is we good in a we mean look which around anticipated, the inside about was yeah, of that disciplined it's look that what lot very some something at look underwriting will at out do years that I our performing And how a amount some the looked view different in we done is the recession last and between a that very a or there say, of why that and performing that partners geography maybe that But out we'll an credit XX something of feel have that portfolio that's extremely we is things as three concentration you business are that recession that maybe done what at that, cyclical and changed a is there and still there line isn't look there about if it, segment we've agreed, we've review what something come it. That and well. that but of that we feel and we how they're that of say pro of at most the that is that, doing But that than exit when think there or there. and that, at what the that opportunity, came originated doesn't

don't So growth, double-digit it's look don't kind growth, estate. see see see but forward of -- digit forward, loan there. we water I low, I I as treading of see look that we kind still of real I see as mid-single don't kind I in

Jon Arfstrom

just but bit volume of you're ability to were of drop in year in is what's what's also mortgage -- saying ago? a in and might seems you funded good. to some up were then me, different back lot. mortgage a a production And sale than I obviously lot ago. it loans QX, us for understand you help of maybe on know is And mortgage, refinanced. Mortgage year a generate you expect that where different on up your that terms is Okay, where off to The mortgage a a production,

Steve Bradshaw

being Yes, the lead our channel, largely servicing exit also some made exited really business. consumer pretty thing. leads is changes we've that's our working I the group that over years out fundamental our business, which made of was months, portfolio, mortgage business. then of branches, purchase on probably focus in decision kind the -- Steve. actually to that existing we two And Really of closer core direct and actually of this the that retention the last in ago XX to Jon, we correspondent coming

that, we've effective we've come process declines, the seen as rate that business business really these to the really ability roaring back of kind of Our fortuitous had with a refi timing been way. in has because

business. So our margins up that are in

squarely operating we've there exited. opportunities and reduced significant was footprint two out in the relationship unit those really is side amount supporting areas of we that focus have that Our a that expense pretty and on of

our business for expense for significant of amount than the where capacity, durability management expense. boom absolutely We really -- today. bit is incremental origination business beneficial So the want that the cautious about in really there. pricing mini about probably kind that we this today. little opposed what's core, of better changed to a that essential purchase about refi fit and kind that us of been a our being But we more to the been footprint, opposed to adding driver we see manage never profitability We're as way We're market across relationships think managing we're the it's for of business to as the we're to that's and using that's fundamentally us. business way think

for take has been We down refi the timing advantageous us. and really that can't good. but core credit been that necessarily, Our for boom has market purchase an ahead really managing in of and increase the

are So with we're pleased we mortgage today. where

Jon Arfstrom

pretty just for volumes. you're like cautiousness, this quarter some commitment not that it Okay. necessarily taper follow-up, looks but with on And you point you're off at expressing seeing in fair? any volumes. guess entering you're some the And the large Is I Steven

Steven Nell

On the mortgage commitment?

Jon Arfstrom


Steven Nell

bit. this a to think there. business Steve's rate rates, good talking Yes, that quarter some the point just see out no there is through you seasonality little generally fourth pipeline -- I that a To that just point, wanted got we've favorable environment to in I despite a

Jon Arfstrom

And then one you. more, for just Steven

for you but know two think I think? do it In it quarter, of balance in cut What rate is terms do have in of, variable-rate NIM. long be week. to your is you a let's cut a and next the you quarters? say loans, we lot a reflected get fully wholesale sheet funding takes a How it

Steven Nell

quarter when flow that funding then you of lag XX XX I about pretty the a I quickly. XX% for of the It days -- takes are is think variable moves, through. overnight, LIBOR, really it mean, of just them wholesale most to days moves that's within pretty deposit on side. -- most And mean or It's that's tied -- and loans immediate to so. are XX takes days And your of kind it then, of your course


management for comments. any I turn At to time, or closing would floor over like this to back the you. Thank additional

Steven Nell

again Thanks for joining us. everyone Okay.

questions, any at email you have at great day. (XXX) call can a you me please Have or If further XXX-XXXX


for Ladies and This gentlemen, you your participation. event. thank concludes today’s

You your disconnect wonderful at day. a time and lines have this