BOK Financial (BOKF) Rises 3.6% on Q1 Earnings & Revenue Beat
BOK Financial Corporation’s BOKF first-quarter earnings per share of $2.43 surpassed the Zacks Consensus Estimate of $2.29. The bottom line increased significantly from the prior-year quarter’s 91 cents. Hence, the investors have been bullish on the stock, as the share price gained 3.6% during yesterday’s trading hours.
Results were aided by an improvement in net interest revenues, driven by higher rates and loan growth. Also, total fees and commissions witnessed a rise in the quarter under review. However, an increase in expenses and provisions were a matter of concern.
Net income attributable to shareholders was $162.4 million, up meaningfully year over year from $62.5 million.
Revenues Improve, Expenses Rise
Quarterly net revenues of $530.2 million (including net interest revenues and total other operating revenues) were up 48.8% year over year. The top line surpassed the Zacks Consensus Estimate of $524.2 million.
Net interest revenues were $352.3 million, up 31.3% year over year. The net interest margin expanded 101 basis points (bps) year over year to 3.45%.
Total fees and commissions were $186 million, up 90.5% year over year. The rise was driven by an increase in almost all fee income components, except for mortgage banking revenues, and deposit service charges and fees.
Total other operating expenses were $305.8 million, up 10.2% year over year. The rise was due to an increase in almost all cost components, except for net occupancy and equipment, amortization of intangible assets, mortgage banking costs, and other expenses.
The efficiency ratio decreased to 56.38% from the prior year’s 75.07%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Mar 31, 2023, total loans were $22.75 billion, up 0.9% sequentially. As of the same date, total deposits amounted to $32.58 billion, down 5.5% from the prior quarter.
Credit Quality Improves
Non-performing assets were $132.9 million, or 0.58% of outstanding loans and repossessed assets as of Mar 31, 2023, down from $352.9 million or 1.70% recorded in the prior-year period.
Allowance for loan losses was 1.10% of outstanding loans as of Mar 31, 2023, down 9 bps year over year. Moreover, the company recorded net charge-offs of $0.8 million, down from $6 million in the prior-year quarter.
However, it recorded provisions of $16 million in the reported quarter. In the prior-year quarter, the company did not record any provisions.
Capital Ratios and Profitability Ratios Improve
As of Mar 31, 2023, the common equity Tier 1 capital ratio was 12.19%, up from 11.30% as of Mar 31, 2022. Tier 1 and total capital ratios on Mar 31, 2023, were 12.20% and 13.21%, respectively, up from 11.31% and 12.25% as of Mar 31, 2022.
The leverage ratio was 9.94%, up from 8.47% as of Mar 31, 2022.
Return on average equity was 13.61% compared with the year-earlier quarter’s 4.93%. Return on average assets was 1.43%, up from 0.50% in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 447,071 shares at an average price of $98.64 per share.
Our View
BOK Financial is poised to benefit from higher loan balances and increased rates. With sound liquidity, its capital-deployment initiatives seem sustainable. However, elevated expenses, as witnessed in the first quarter, might hurt the bottom line in the near term.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation price-consensus-eps-surprise-chart | BOK Financial Corporation Quote
BOK Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Zions Bancorporation’s ZION first-quarter 2023 net earnings per share of $1.33 lagged the Zacks Consensus Estimate of $1.51. The bottom line increased 4.7% from the year-ago quarter.
ZION’s results were adversely impacted by higher provisions, a rise in non-interest expenses and lower deposit balances. However, there was an improvement in net interest income (NII), which was driven by rising rates and decent loan demand. Non-interest income also increased for the quarter.
Bank OZK’s OZK first-quarter 2023 earnings per share of $1.41 missed the Zacks Consensus Estimate of $1.43. The bottom line, however, reflects a rise of 38.2% from the year-earlier quarter.
OZK’s results were adversely impacted by lower non-interest income, higher expenses, and a rise in provision for credit losses on worsening economic outlook. Yet, there was an improvement in NII, driven by higher loan balances and rising rates. Also, the company witnessed a rise in deposit balance during the quarter.
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BOK Financial Corporation (BOKF) : Free Stock Analysis Report
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