BOK Financial Corporation

First quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Stephen Nell. Thank you. You may begin.

Good morning, and thanks for joining us. Today, our President and CEO, Stacey Kynes, will provide opening comments, and Mark Maughan, Executive Vice President for Regional Banking, will cover our loan portfolio and related credit metrics. Scott Grauer, Executive Vice President of Wealth Management, will cover our fee-based results, and I'll provide details regarding net interest income, net interest margin, expenses, and our overall balance sheet position from a liquidity and capital standpoint. PDFs of the slide presentation and first quarter press release are available on our website at BOKF.com. We refer you to the disclaimers on slide two regarding any forward-looking statements we make during the call. I'll now turn the call over to Stacy Kimes.

Good morning, and thanks for joining us to discuss BOK Financial's first quarter financial results. Starting on slide four, first quarter net income was $62 million, or $0.91 per diluted share, a $55 million decline from last quarter. The first quarter ushered in dramatic changes in the economic and geopolitical environment, resulting in extreme interest rate volatility. This volatility negatively impacted our mortgage-related businesses, especially our mortgage trading activities. On a pre-tax basis, our net contribution from our institutional trading group decreased $43 million linked quarter. Demand for lower coupon U.S. government agency residential mortgage-backed securities was constrained as investors reacted to interest rate volatility and market uncertainty. Interest rate volatility also negatively impacted outcomes in our mortgage servicing rights hedging results, creating a $13 million pre-tax decline in performance compared to the fourth quarter. Finally, the other material component driving the linked quarter decline was the $17 million pre-tax reserve release recognized last quarter. The most impressive story for this quarter has been the loan growth experienced. Excluding Triple P loans, our core loan portfolio increased 608 million or 3% linked quarter. The credit quality of our loan book continues to be outstanding. We determined the current reserve for loan losses was appropriate therefore no reserve release this quarter. Continued strength in commodity prices and improved credit metrics were sufficient to offset this quarter's loan growth in changes in the economic outlook. Our forecast for GDP growth and unemployment, while consistent with pre-pandemic levels, are tempered compared to the prior quarter. Turning to slide five, total loans grew 469 million, or 2.3% linked quarter. but that is net of an additional $139 million in Triple P loan forgiveness during the first quarter. Core CNI loan balances are up 12% annualized. CNI commitments grew as well, with relatively no change in the core utilization rate, which positions us well with plenty of growth capacity as the economy continues to rebound. As expected, our commercial real estate group returned a positive growth this quarter, with period and commercial real estate balances increasing $270 million. Loans attributed to our wealth segment were materially consistent with the fourth quarter. Average deposits increased $560 million this quarter. However, period balances were down $1.8 billion. We experienced a significant seasonal inflow of deposits during the fourth quarter in our commercial and wealth business lines, with over 65% of that increase off the balance sheet by the end of the first quarter. Compared to March 31st, 2021, period end balances are now 1.6 billion, or 4.2% higher than last year. Assets under management or in custody in our wealth management fell slightly this quarter, down 3.7% to 101.1 billion. More than half of that change was market value driven, Compared to March 31, 2021, assets under management or in custody are up $9.1 billion, or almost 10%. I'll provide additional perspective on the results before starting a Q&A session, but now Mark Wan will review the loan portfolio and our credit metrics in more detail. I'll turn the call over to Mark.