We are upgrading our recommendation on BOK Financial Corp. (BOKF) to Outperform from Neutral based on the improvements in its credit quality trends amidst economic recovery across its primary markets.
Aided by growth in net interest revenue as well as fees and commissions revenue, BOK Financial reported first-quarter earnings of $1.22 per share, well above the Zacks Consensus Estimate of $1.03.
The company also reported growth in commercial loan balances. Its diverse revenue mix and favorable geographic footprint also backed its growth.
BOK Financial also remains committed to boost shareholders’ wealth. With a solid capital position and consistent performance, BOK Financial hiked its quarterly cash dividend by a nickel, which now stands at 38 cents per share. This marked the seventh consecutive annual increase since the company paid its first cash dividend in 2005.
While a low interest rate environment and regulatory issues are the headwinds for BOK Financial, we believe that its diverse revenue mix and favorable geographic footprint would back its growth.
In fact, strategic expansions and the local-leadership based business model of BOK Financial, which has peers such as Cullen/Frost Bankers Inc. (CFR) and First Financial Bankshares Inc. (FFIN), aided it to expand into a leading financial service provider from a bank in Oklahoma.
Besides its diverse revenue base and sturdy capital position, expense control initiatives augur well for investors. Moreover, BOK Financial’s capital deployment efforts will give a fillip to investors’ confidence in the stock.
In addition, the shares of BOK Financial currently retain a Zacks #2 Rank, which translates into a short-term Buy rating.
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