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Risk, Reward Balance BOK Financial

Zacks Equity Research

We have reaffirmed our Neutral recommendation on BOK Financial Corporation (BOKF) based on its fundamentals post-first quarter 2012 earnings release, the current economic environment and the capital deployment efforts.

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 announced a nickel’s hike in its quarterly cash dividend, which will now stand at 38 cents per share versus 33 cents per share.

This marked the seventh consecutive annual increase since the company paid its first cash dividend in 2005. The increased dividend will be paid on or about May 29, 2012 to shareholders of record as of May 15.

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.

BOK Financial’s diverse revenue stream, sturdy capital position and expense control initiatives augur well for investors. The dividend hike will also give a fillip to investors’ confidence in the stock.

Nevertheless, with a protracted economic recovery, we expect revenue growth to be limited. Furthermore, we remain concerned about the regulatory issues and a low interest rate environment.

Hence, the risk/reward profile remains balanced for BOK Financial and we have a Neutral recommendation on the stock.

However, the shares of BOK Financial currently retain a Zacks #2 Rank, which translates into a short-term Buy rating.

Read the Full Research Report on BOKF

Read the Full Research Report on CFR

Read the Full Research Report on FFIN

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