BOK FINANCIAL CORP (BOKF)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Performance Summary

BOK Financial reported net income of $176.5 million, or $2.92 per diluted share, for the second quarter of 2026 compared to $155.8 million, or $2.58 per diluted share, for the first quarter of 2026. Excluding the net gain related to the exchange of our Visa shares and the loss from repositioning of the available-for-sale securities portfolio1, net income would have been $156.5 million, or $2.59 per diluted share, in the second quarter of 2026. PPNR1, a non-GAAP measure, was $227.7 million for the second quarter of 2026, compared to $199.7 million in the first quarter of 2026.

Highlights of the second quarter of 2026 compared to the first quarter of 2026 included:

•Net interest income totaled $351.8 million, an increase of $9.3 million over the prior quarter. Net interest margin was 2.91% for the second quarter of 2026, compared to 2.90% for the prior quarter. For the second quarter of 2026, our core net interest margin excluding trading activities1, a non-GAAP measure, was 3.13% compared to 3.15% in the prior quarter.

•Fees and commissions revenue totaled $202.0 million, a decrease of $7.8 million. Lower trading fees and commissions revenue was partially offset by growth in fiduciary and asset management revenue and increased investment banking revenue.

•Other gains (losses), net, were a net gain of $42.4 million compared to a net loss of $216 thousand in the prior quarter. The second quarter of 2026 included a $30.9 million pre-tax gain, net of economic hedge, related to the exchange of our Visa shares under the recently announced Exchange Offer by Visa, Inc. The current quarter also included a net gain on investments related to deferred compensation of $8.8 million compared to a net loss of $1.8 million in the prior quarter.

•Losses on available-for-sale securities, net, were $4.6 million in the second quarter of 2026 as we repositioned the portfolio by selling approximately $268 million of lower-yielding debt securities.

•Other operating expense totaled $361.7 million, an increase of $7.5 million compared to the prior quarter. Personnel expense increased $2.9 million and non-personnel expense increased $4.6 million. Excluding the impact of deferred compensation, personnel expense decreased $6.0 million.

•Period end outstanding loan balances totaled $27.1 billion at June 30, 2026, up $896 million over March 31, 2026, with broad-based growth across the loan portfolio. Average loan balances increased $844 million to $26.8 billion.

•No provision for expected credit losses was necessary for the second quarter of 2026. An improvement in economic forecast assumptions, including GDP growth, lower unemployment, and improved vacancy rates compared to the prior quarter, was offset by the impact of loan growth during the quarter. Net charge-offs in the second quarter were $500 thousand, or 0.01% of average loans on an annualized basis. The resulting combined allowance for credit losses totaled $323 million, or 1.19% of outstanding loans at June 30, 2026. The combined allowance for credit losses was $323 million, or 1.23% of outstanding loans at March 31, 2026.

•Nonperforming assets not guaranteed by U.S. government agencies were $55 million, a $2.8 million increase compared to March 31, 2026. Accruing substandard loans decreased by $19 million while other loans especially mentioned decreased by $8.3 million compared to March 31, 2026.

•Period end deposits increased by $1.2 billion to $39.9 billion at June 30, 2026. Average deposits increased $250 million, including a $261 million increase in average interest-bearing deposits and an $11 million decrease in average demand deposit balances. The loan to deposit ratio was 68% at June 30, 2026, consistent with the prior quarter.

•Assets under management or administration totaled $129.3 billion at June 30, 2026, increasing $5.7 billion over March 31, 2026, led by increased market valuations and continued customer expansion.

•The Company's tangible common equity ratio1, a non-GAAP measure, was 9.61% at June 30, 2026, and 9.29% at March 31, 2026. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on AFS securities.

1    See "Explanation and Reconciliation of Non-GAAP Measures" section following.

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•The common equity Tier 1 capital ratio at June 30, 2026, was 12.89%. Other regulatory capital ratios include the Tier 1 capital ratio at 12.89%, total capital ratio at 14.67%, and leverage ratio at 9.81%. At March 31, 2026, the common equity Tier 1 capital ratio was 12.61%, the Tier 1 capital ratio was 12.61%, the total capital ratio was 14.39%, and the leverage ratio was 9.85%.

•The Company paid a regular cash dividend of $38.1 million, or $0.63 per common share, during the second quarter of 2026. On August 4, 2026, the Board approved a quarterly cash dividend of $0.63 per common share payable on or about September 2, 2026, to shareholders of record as of August 19, 2026.

Highlights of the six months ended June 30, 2026, compared to the six months ended June 30, 2025 included:

•Net income for the six months ended June 30, 2026 totaled $332.3 million, or $5.49 per diluted share, compared to $259.8 million, or $4.05 per diluted share, for the six months ended June 30, 2025.

•Net interest income totaled $694.4 million for the six months ended June 30, 2026, and $644.4 million for the six months ended June 30, 2025. Net interest income increased $31.4 million from changes in interest rates and increased $18.7 million from changes in earning assets. Net interest margin was 2.91% compared to 2.79%. The AFS securities portfolio yield increased 10 basis points, while the yield on trading securities decreased 31 basis points. The loan portfolio yield decreased 49 basis points. Funding costs decreased 49 basis points. The cost of interest-bearing deposits was down 51 basis points. Average earning assets increased $2.0 billion to $48.3 billion, largely driven by higher average balances for loans and AFS securities, partially offset by a decrease in average trading securities. Total interest-bearing deposits increased $1.2 billion, partially offset by a decrease of $369 million in demand deposit balances. Other borrowed funds increased $676 million and average subordinated debentures increased $281 million.

•Fees and commissions revenue totaled $411.8 million for the six months ended June 30, 2026, a $30.3 million increase over the six months ended June 30, 2025. Fiduciary and asset management revenue increased $12.6 million led by growth in trust fees related to higher market valuations and continued growth in client relationships. Brokerage and trading revenue increased $6.9 million. Trading revenue increased $3.4 million led by higher municipal bond and government agency trading activities, partially offset by decreased U.S. agency residential mortgage-backed securities trading volumes. Investment banking revenue increased $2.8 million driven by growth in syndication fees. Transaction card revenue increased $6.9 million due to disciplined pricing strategies, targeted customer acquisition efforts, and an increase in the volume of transactions processed during the period. Deposit service charges increased $4.0 million, primarily due to growth in commercial service charges.

•Other gains (losses), net, increased $34.8 million as the six months ended June 30, 2026 included a $30.9 million pre-tax gain, net of economic hedge, related to the exchange of our Visa shares under the recently announced Exchange Offer by Visa, Inc.

•Total operating expense was $715.8 million for the six months ended June 30, 2026, an increase of $13.8 million over the six months ended June 30, 2025. Personnel expense decreased $3.6 million. Employee benefits expense decreased $9.4 million due to a combination of lower retirement plan costs and employee healthcare costs. Deferred compensation expense increased $6.7 million, while share-based compensation costs decreased $2.0 million due to changes in assumptions of certain performance-based equity awards. Non-personnel expense increased $17.4 million. Mortgage banking costs grew $9.2 million due to increased prepayments. Data processing and communications expense was up $6.3 million, largely driven by costs associated with ongoing projects.

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Results of Operations

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on debt securities, loans, and other interest-earning assets less interest paid for interest-bearing deposits and other borrowings. The net interest margin is calculated by dividing tax-equivalent net interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is typically greater than net interest spread due to interest revenue earned on assets funded by noninterest-bearing liabilities such as demand deposits and equity.

Tax-equivalent net interest income totaled $354.5 million for the second quarter of 2026, compared to $345.2 million in the prior quarter. Net interest income increased $5.7 million from changes in interest rates and increased $3.7 million from changes in earning assets. Table 1 shows the effect on net interest income from changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities.

Average earning assets increased $1.0 billion over the first quarter of 2026. Average loan balances increased $844 million, with broad-based growth across the loan portfolio. The average balance of trading securities increased $259 million and average restricted equity securities increased $100 million.

Total average deposits increased $250 million compared to the first quarter of 2026, including a $261 million increase in interest-bearing deposits and an $11 million decrease in demand deposits. Average funds purchased and repurchase agreements decreased $403 million, while average other borrowings increased $1.6 billion.

Net interest margin was 2.91% compared to 2.90% in the first quarter of 2026. For the second quarter of 2026, our core net interest margin excluding trading activities1, a non-GAAP measure, was 3.13% compared to 3.15% in the prior quarter. Net interest margin benefited from favorable repricing of fixed-rate assets and deposits. During the quarter, these positive drivers were partially offset by a 3 basis point impact from cash margin posted on behalf of our energy customers as oil prices increased during the quarter.

The tax-equivalent yield on average earning assets was 5.27%, an increase of 4 basis points. The yield on trading securities increased 21 basis points to 4.85%, while the yield on restricted equity securities increased 27 basis points to 7.66%.

The yield on available-for-sale securities increased 5 basis points to 3.98%, while the loan portfolio yield decreased 5 basis points to 6.20%.

Funding costs were 2.93%, a 1 basis point increase over the prior quarter. The cost of interest-bearing deposits decreased 4 basis points to 2.67%. The cost of funds purchased and repurchase agreements increased 19 basis points to 3.09%, while the cost of other borrowings decreased 2 basis points to 3.88%. The benefit to net interest margin from assets funded by noninterest-bearing liabilities was 57 basis points, a decrease of 2 basis points.

Our overall objective is to manage the Company's balance sheet for changes in interest rates as described in the Market Risk section of this report. At June 30, 2026, approximately 84% of our commercial and commercial real estate loan portfolios are either variable rate loans or fixed rate loans that will reprice within one year. These loans are funded primarily by deposit accounts that are either n

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

1    Includes allowance for loan losses and accrual for off-balance sheet credit risk.

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Management’s Assessment of Operations and Financial Condition

Overview

The following discussion is management's analysis to assist in the understanding and evaluation of the financial condition and results of operations of BOK Financial. This discussion should be read in conjunction with the Consolidated Financial Statements and footnotes and selected financial data presented elsewhere in this report. This section and other sections provide information about our recent financial performance. For information about results of operations for 2024 compared with 2023, see the respective sections in Management's Discussion and Analysis included in our 2024 Form 10-K filed on February 19, 2025.

Reflecting the Federal Reserve's cautious confidence that inflation is moderating, the federal funds rate was reduced by 75 basis points over the last four months of 2025 to balance between inflation progress and emerging labor-market risks. The housing market showed some signs of recovery, with slight increases in sales and inventory. Homeownership affordability is being significantly impacted by the combination of higher mortgage interest rates and elevated home prices, which has greatly affected first-time homebuyers. Consumer spending also continues to remain stable but constrained, supported by continued demand for essential services while discretionary spending softened amid elevated prices and increased budget sensitivity. Unemployment increased slightly to 4.4% for December 2025. See "Summary of Credit Loss Experience" section of Management's Discussion and Analysis for additional discussion around our economic forecast.

Performance Summary

Net income for the year ended December 31, 2025, totaled $578.0 million, or $9.17 per diluted share, compared with net income of $523.6 million, or $8.14 per diluted share, for the year ended December 31, 2024. PPNR1, a non-GAAP measure, was $742.6 million for 2025, compared to $684.7 million in the prior year.

Highlights of 2025 included:

•Net interest income totaled $1.3 billion for 2025, a $116.6 million increase over the prior year. Net interest margin was 2.87% for 2025, compared to 2.65% for 2024, reflecting the funding shift from wholesale borrowings to interest-bearing deposits, along with improving yields on the AFS securities portfolio. Average earning assets were $46.4 billion for 2025, up $866 million over 2024, largely due to expansion of the AFS securities portfolio and growth in loan portfolio balances.

•Fees and commissions revenue was $800.7 million for 2025, consistent with the prior year. Brokerage and trading revenue decreased $58.4 million, largely due to a shift from trading revenue to net interest income on trading securities. Fiduciary and asset management revenue increased $26.3 million led by growth in trust fees related to higher market valuations and continued growth in client relationships. Transaction card revenue was up $8.8 million due to disciplined pricing strategies, targeted customer acquisition efforts, and an increase in the volume of transactions processed during the year. Deposit service charges increased $6.8 million due to growth in commercial service charges.

•Other gains, net, were $43.8 million for 2025, including a $23.5 million pre-tax gain on the sale of a merchant banking investment. Other gains, net, for 2024 were $79.7 million, which included a $56.9 million pre-tax gain recognized in connection with the receipt and disposition of Visa C shares received as a result of the Exchange Offer announced by Visa, Inc. in the second quarter of 2024.

•Gains on AFS securities totaled $2.0 million for the year ended December 31, 2025, compared to a loss of $45.8 million in the prior year resulting from the strategic repositioning of our portfolio.

•Other operating expense increased $67.1 million to $1.4 billion. Personnel expense grew $66.7 million, reflecting a combination of annual merit increases, salary adjustments, and business expansion. Non-personnel expense was consistent with the prior year. The current year included a benefit of $10.7 million from FDIC updates to the special assessment estimate, along with other adjustments to the special assessment, compared to a $5.5 million expense in the prior year. The prior year included $13.6 million in charitable contributions to the BOKF Foundation, largely driven by the $10.0 million donation of converted Visa shares to the foundation. These decreases in expense for 2025 were largely offset by higher costs for data processing and communications, professional fees and services, business promotion, and net occupancy and equipment.

1    See Explanation and Reconciliation of Non-GAAP Measures in "Non-GAAP Measures" section following.

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•The net economic benefit of the changes in the fair value of MSR and related economic hedges was $1.1 million during 2025, compared to a net economic cost of $5.7 million during 2024, due to reduced market volatility throughout 2025.

•The provision for credit losses was $2.0 million in 2025. The impact of loan growth was partially offset by an improvement in credit quality and the forecasted economic outlook during the year. Credit quality remained strong with net charge-offs of $6.7 million, or 0.03% of average loans in 2025, compared to $12.9 million, or 0.05% of average loans in 2024. We recorded an $18.0 million provision for expected credit losses in 2024. The combined allowance for credit losses totaled $327 million or 1.28% of outstanding loans at December 31, 2025. The combined allowance for credit losses was $332 million or 1.38% of outstanding loans at December 31, 2024.

•Nonperforming assets not guaranteed by U.S. government agencies totaled $66 million at December 31, 2025, up from a historic low of $42 million at December 31, 2024. Accruing substandard loans decreased $71 million, while other loans especially mentioned increased $29 million and nonaccrual loans increased $28 million.

•Average outstanding loan balances were $24.6 billion, growing $416 million over the prior year. Average loans to individuals increased $468 million and commercial real estate loans grew $366 million, while commercial loans decreased $418 million. Period end outstanding loan balances increased $1.5 billion to $25.7 billion at December 31, 2025.

•Average deposits increased $2.4 billion to $38.7 billion. Average interest-bearing deposits increased $2.8 billion, while average demand deposits decreased $413 million. Period end deposits increased $1.2 billion to $39.4 billion. The loan to deposit ratio was 65% at December 31, 2025, compared to 63% at December 31, 2024.

•Assets under management or administration totaled $126.6 billion at December 31, 2025, increasing $12.0 billion over December 31, 2024, primarily driven by improvements in the equity markets and growth in customer relationships during 2025.

•The Company's tangible common equity ratio1, a non-GAAP measure, was 9.46% at December 31, 2025, and 9.17% at December 31, 2024. The tangible common equity ratio is primarily based on total shareholders' equity, which includes unrealized gains and losses on AFS securities.

•The Company's common equity Tier 1 capital ratio was 12.90% at December 31, 2025. In addition, the Tier 1 capital ratio was 12.90%, total capital ratio was 14.77% and leverage ratio was 9.86% at December 31, 2025. At December 31, 2024, the Tier 1 capital ratio was 13.04%, the total capital ratio was 14.21%, and the leverage ratio was 9.97%.

•The Company repurchased 3,656,259 common shares at an average price of $105.72 per share during 2025 and 1,028,806 common shares at an average price of $86.49 during 2024.

•The Company paid cash dividends of $2.34 per common share during 2025, and $2.22 per common share in 2024.

Net income for the fourth quarter of 2025 totaled $177.3 million, or $2.89 per diluted share, compared to $140.9 million, or $2.22 per diluted share, for the third quarter of 2025.

Highlights of the fourth quarter of 2025 included:

•Net interest income totaled $345.3 million, an increase of $7.6 million over the prior quarter. Net interest margin expanded 7 basis points to 2.98% from 2.91%. For the fourth quarter of 2025, our core net interest margin excluding trading activities1, a non-GAAP measure, grew 6 basis points to 3.22% compared to 3.16% in the prior quarter.

•Fees and commissions revenue was $214.9 million, up $10.4 million, led by growth in brokerage and trading revenue, fiduciary and asset management revenue, and transaction card revenue.

•Other gains, net, were $28.1 million for the fourth quarter of 2025, compared to $8.3 million in the third quarter of 2025. The fourth quarter included a $23.5 million pre-tax gain on the sale of a merchant banking investment.

•Operating expense decreased $8.7 million to $361.1 million. Excluding the FDIC special assessment benefit, personnel expense decreased $3.6 million and non-personnel expense increased $3.2 million.

•No provision for credit losses was necessary for the fourth quarter of 2025. The provision for credit losses was $2.0 million in the third quarter of 2025. Net charge-offs were $1.4 million, or 0.02% of average loans on an annualized basis, in the fourth quarter.

1    See Explanation and Reconciliation of Non-GAAP Measures in "Non-GAAP Measures" section following.

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Critical Accounting Policies & Estimates

The Consolidated Financial Statements and accompanying notes are prepared in accordance with GAAP. The Company's accounting policies are more fully described in Note 1 to the Consolidated Financial Statements. Management makes significant assumptions and estimates in the preparation of the Consolidated Financial Statements and accompanying notes in conformity with GAAP that may be highly subjective, complex, and subject to variability. Actual results could differ significantly from these assumptions and estimates. The following discussion addresses the most critical areas where these assumptions and estimates could affect the financial condition, results of operations, and cash flows of the Company. These critical accounting policies and estimates have been discussed with the appropriate committees of the Board of Directors.

Allowance for Loan Losses and Accrual for Off-Balance Sheet Credit Risk from Loan Commitments

The allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments represent the portion of amortized cost basis of loans and related unfunded commitments we do not expect to collect over the asset’s contractual life, considering past events, current conditions, as well as reasonable and supportable forecasts of future economic conditions. Quarterly, a senior management Allowance Committee assesses the appropriateness of the allowance for loan losses and accrual for off-balance sheet credit risk. This assessment requires judgment about effects of uncertain matters, resulting in a subjective calculation which is inherently imprecise. Because of the subjective forward-looking nature of the c

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