BOKF income up strongly for 2Q, six months

BOK financial Corp. reported net income for the second quarter of $63.5 million, or 93 cents per diluted share, up from $60.1 million, or 88 cents per diluted share, in the first quarter and $52.1 million, or 77 cents per diluted share, for the second quarter of 2009.

Net income for the six months ended June 30 totaled $123.7 million, or $1.81 per diluted share, compared with $107.1 million, or $1.58 per diluted share, for the six months ended June 30, 2009.

Net income for the first quarter of 2010 included a $6.5 million, or 10 cents per share, day-one gain from the purchase of the rights to service $4.2 billion of residential mortgage loans on favorable terms. Net income for the second quarter of 2009 included a $7.7 million, or 11 cents per share, special assessment charge by the FDIC.

“Operating revenue was especially strong in the second quarter of 2010,” said President and CEO Stan Lybarger. “Revenue for all significant fee income business lines grew over the previous quarter. Additionally, continued improvement in credit quality indicators allowed us to lower our quarterly provision for credit losses for the third consecutive quarter.”

Highlights of second quarter of 2010 included:

• Net interest revenue totaled $182.1 million, compared with $182.6 million for the first quarter. Net interest margin was 3.63 percent for the second quarter and 3.68 percent for the first quarter.

• Fees and commissions revenue increased $12.9 million over the previous quarter to $128.2 million. Brokerage and trading revenue was up $3.7 million, and mortgage banking revenue was up $3.5 million.

• Operating expenses, excluding changes in the fair value of mortgage servicing rights, totaled $186.5 million, up $8.8 million over the prior quarter. Net losses and operating expenses of repossessed assets increased $5.8 million.

• Combined reserves for credit losses totaled $315 million, or 2.89 percent, of outstanding loans at June 30 and $314 million, or 2.86 percent, of outstanding loans at March 31. Net loans charged off and provision for credit losses were $35.6 million and $36.0 million, respectively, for the second quarter, compared with $34.5 million and $42.1 million, respectively, for the first quarter.

• Nonperforming assets totaled $461 million, or 4.19 percent, of outstanding loans and repossessed assets at June 30, compared with $483 million, or 4.36 percent, of outstanding loans and repossessed assets at March 31. Newly identified nonaccruing loans totaled $58 million for the second quarter and $81 million for the first quarter.

• Available-for-sale securities totaled $9.2 billion at June 30, up $322 million since March 31. Other-than-temporary impairment charges on certain privately issued residential mortgage backed securities reduced pretax income by $2.6 million during the second quarter and $4.2 million during the first quarter.

• Outstanding loan balances were $10.9 billion at June 30, down $89 million since March 31. Commercial real estate loans decreased $103 million. The outstanding balance of commercial loans and unfunded commercial loans were largely unchanged for the quarter.

• Total period end deposits increased $560 million during the second quarter to $16.1 billion due primarily to growth in interest-bearing transaction and demand deposits.

• Tangible common equity ratio increased to 8.88 percent at June 30 from 8.46 percent at March 31, due to an increase in the fair value of the securities portfolio and retained earnings growth. The tangible common equity ratio is a non-GAAP measure of capital strength used by the company and investors based on shareholders’ equity minus intangible assets and equity that does not benefit common shareholders, such as equity provided by the U.S. Treasury’s Asset Relief Program. We chose not to participate in the TARP Capital Purchase Program. The company and each of its subsidiary Banks exceeded the regulatory definition of well-capitalized. The company’s Tier 1 capital ratios as defined by banking regulations were 11.9 percent at June 30 and 11.45 percent at March 31.

The company paid a cash dividend of $16.8 million, or 25 cents per common share, during the second quarter. On July 27, the board of directors approved a quarterly cash dividend of 25 cents per common share payable on or about Aug. 27, 2010, to shareholders of record as of Aug. 13, 2010.