BOK Financial Corporation

Greetings and welcome to the BOK Financial Corporation second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session 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 presentation over to Marty Gruntz, Chief Financial Officer for BOK Financial Corporation. Thank you, sir. You may begin.

Good morning, and thank you for joining us. Today, our CEO, Stacey Kimes, will provide opening comments. Mark Maughan, Executive Vice President for Regional Banking, will cover our loan portfolio and related credit metrics. And Scott Brower, Executive Vice President of Wealth Management, will cover our fee-based results. I will then discuss financial performance for the quarter and our forward guidance. PDFs of the slide presentation and second 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 this call. I'll now turn the call over to Stacy Kimes.

Good morning. Thanks for joining us to discuss BOK Financial's second quarter financial results. Starting on slide four, second quarter net income was $151 million, or $2.27 per diluted share. I am proud of the exceptional second quarter financial results delivered across the board by our team. Wealth segment revenues set another record this quarter and core loans reached an all-time high, led by the commercial and multifamily segments. Our growth efforts are supported by the vitality of our geographic footprint as well as our diverse business model. Non-interest revenues were almost 40% of total revenues for the quarter. Using our capital and liquidity strength, we are taking advantage of market and economic uncertainty to prudently grow. Our full-service banking market expansion into San Antonio and the addition of a fixed-income sales and trading office in Memphis are just two more examples of how we are investing to build long-term shareholder value. That disciplined, long-view approach has consistently been a distinct advantage for BOK Financial. Turning to slide five, Period-end core loan balances increased $488 million, or 2.1% linked quarter, with growth spread across C&I and commercial real estate. The deposit trajectory flattened and turned positive during the quarter. Our loan-to-deposit ratio remained below 70% at the end of the quarter. Across the industry, deposit costs have accelerated for all banks, including us, as reported in our results. As Marty will detail later, our reported net interest margin is diluted by the increased trading activity this quarter, and our margin excluding the trading activities remained healthy at 3.36%. We're seeing early signs of loan spreads increasing as banks seek to contract and also work through the impact of higher deposit costs and anticipated higher capital requirements for some. This impact will take many quarters to become meaningfully apparent. Our efficiency ratio came in just below 59%, even with the shift in mix of non-interest revenue. Credit quality remains very strong as we continue to grow our allowance and have a combined reserve of 1.39%, which is notably above the median of our peer group. Assets under management or administration grew 1.3 billion, or 1.3% link order, and were up 7.6 billion, or 8%, compared to last year. The market impact on cash, equities, and fixed income combined with the growth in new relationships is providing a tailwind we did not have for this area in 2022. Finally, we repurchased 266,000 shares this quarter as we balance opportunities for growth with attractive repurchase valuations. I'll provide additional perspective on the results before starting the Q&A session. But now Mark Maughan will review the loan portfolio and our credit metrics in more detail. I'll turn the call over to Mark.