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Why Is BOK Financial (BOKF) Down 1.7% Since Last Earnings Report?

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A month has gone by since the last earnings report for BOK Financial (BOKF). Shares have lost about 1.7% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is BOK Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

BOK Financial Q4 Earnings & Revenues Miss

BOK Financial’s fourth quarter earnings per share of $1.71 missed the Zacks Consensus Estimate of $1.81. The bottom line decreased 22.6% from the prior-year quarter.

Results were undermined by lower fees and commissions, and a decline in loan balance. Nonetheless, lower expenses and provision benefits were tailwinds.

Net income attributable to shareholders was $117.3 million, down 23.9% year over year.

In 2021, earnings of $8.95 per share missed the consensus estimate of $9.08. Net income was $618 million, up significantly from $435 million in 2020.

Revenues, Costs & Loan Balance Decline

Net revenues of $423.4 million (including net interest revenues and total fees and commissions) in the quarter were down 11.5% year over year. The top line lagged the Zacks Consensus Estimate of $453.4 million.

In full-year 2021, net revenues decreased 7.2% to $1.78 billion. The top line missed the consensus estimate of $1.89 billion.

Net interest revenues were $277.1 million in the quarter, down 6.8% year over year. NIM shrunk 20 basis points (bps) to 2.52%.

Total fees and commissions amounted to $146.3 million, down 19.2%. The fall was largely due to lower brokerage and trading revenues, and mortgage banking revenues.

Total other operating expenses were $299.5 million, down 1.1%. The fall was mainly due to lower personnel costs, professional fees, and services and mortgage banking costs.

The efficiency ratio rose to 70.14% from the prior year’s 62.77%. A rise in efficiency ratio indicates deterioration in profitability.

As of Dec 31, 2021, total loans were $20.2 billion, down 0.7% sequentially. As of the same date, total deposits amounted to $41.2 billion, up 7.1%.

Strong Credit Quality

Provision for expected credit losses was a benefit of $17 million compared with $6.5 million in the prior-year quarter. Non-performing assets were $369.3 million or 1.83% of outstanding loans and repossessed assets as of Dec 31, 2021, down from $476.9 million or 2.07% recorded in the prior-year period.  Net recoveries were $0.71 million, against net charge-offs of $16.7 million reported in the prior-year quarter. Allowance for loan losses was 1.27% of outstanding loans as of Dec 31, 2021, down 42 bps year over year.

Capital Position Improves, Profitability Ratios Deteriorate

As of Dec 31, 2021, the common equity Tier 1 capital ratio was 12.23%, up from 11.95% as of Dec 31, 2020. Tier 1 and total capital ratios on Dec 31, 2021, were 12.24% and 13.28%, respectively, compared with 11.95% and 13.82% as of Dec 31, 2020. The leverage ratio was 8.55%, up from 8.28% as of Dec 31, 2020.

Return on average equity was 8.66% compared with the year-earlier quarter’s 11.75%. Return on average assets was 0.92%, down from the 1.22% recorded in the year-ago quarter.

Share Repurchase Update

In the reported quarter, the company repurchased 128,522 shares at an average price of $104.46 per share.

2022 Outlook

Management estimates loan growth to accelerate, with period-end growth of 6-7%. Deposits are expected to fall less than 2%. Core net interest income (excluding the impact of PPP loans) is expected to increase 3.5%, backed by loan growth. Core NIM is anticipated to remain stable in early 2022 with improvement as the Fed starts increasing rates (likely in mid-year 2022).

Total fee revenues are expected to face tough comparisons from the historically high levels of 2021. Trading & brokerage, and mortgage revenues are projected to decline in the mid to upper-single digit range. All other fee categories are expected to see mid-single-digit growth. Fee income is anticipated to account for 40% of total revenues.

The company aims to maintain operating expense growth at or below 2%. The overall loan loss reserve as a percent of loan balances is expected to migrate toward 1.20% by 2022 end.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, BOK Financial has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BOK Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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