Financial Data and Key Metrics Changes - The company reported earnings of $140 million, or EPS of $2.19 per diluted share for the second quarter, indicating a positive momentum in financial performance [4] - Net interest income grew for the fifth consecutive quarter, with a loan to deposit ratio of 64% and total capital levels remaining robust, with TCE reaching 9.6% and CET1 reaching 13.6% [6][7] - Total outstanding loans increased by 2.5% quarter over quarter, translating to over 10% on an annualized basis [8] Business Line Data and Key Metrics Changes - Fee income increased by 7.2% sequentially, with total fees and commissions contributing $197.3 million to revenue [5][14] - The core C and I loan portfolio grew by 1.1%, while the specialty lending portfolio decreased by 1.6% [8] - The commercial real estate (CRE) business saw a significant increase of 6.9% quarter over quarter, primarily driven by multifamily housing, retail, and industrial projects [9] Market Data and Key Metrics Changes - The trading revenue, including trading-related net interest income, was $30.5 million, representing a growth of 31% from the prior quarter [14] - Assets Under Management (AUMA) increased by $3.9 billion to $117.9 billion, reflecting increased market valuations and continued new business growth [16] Company Strategy and Development Direction - The company plans to launch a new mortgage finance line of business to support future loan growth, which is expected to enhance long-term sustainable growth [5][10] - The management emphasized the importance of investing in talent and systems to enable future growth, despite the increase in current period expenses [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the loan growth outlook set at the beginning of the year, despite acknowledging economic policy uncertainty as a risk factor [21][22] - The company expects net charge-offs to remain below historical norms, supported by strong credit quality across the loan portfolio [12][22] Other Important Information - The company repurchased over 660,000 shares below $94 per share and redeemed all $131 million of Tier two capital instruments [7] - The combined allowance for credit losses is $330 million, or 1.36% of outstanding loans, indicating a healthy reserve level [13] Q&A Session Summary Question: Expectations for margin trajectory behind NII - Management noted that margin behaved well in Q2, with good lift from fixed asset repricing and deposit pricing, expecting continued support for margin growth [27][28] Question: Loan growth pace through the quarter - Management indicated that loan growth built throughout the quarter, with expectations for continued growth in the second half of the year, particularly in C and I and CRE [36][39] Question: Competitive environment for loan yields - Management acknowledged strong competition in their markets, with some spread compression observed on the C and I side, but overall spreads are holding well [40][41] Question: Fee income guidance for the full year - Management expressed confidence in continued growth across various fee income lines, driven by strong performance in fiduciary and asset management, transaction card, and deposit service charges [49][50] Question: Outlook on mortgage finance and expected balances - Management expects to achieve approximately $500 million in commitments by the end of the year, with a utilization rate of around 25% to 50% [81][82] Question: Funding expectations for loan growth - Management indicated a strong loan to deposit ratio and expects to continue growing deposits, with cash flows from the bond book and loan book supporting funding needs [102][103]

Core Insights - BOK Financial Corporation (BOKF) reported better-than-expected second-quarter 2025 results, with earnings per share of $2.19, surpassing the Zacks Consensus Estimate of $1.98, although this represents a 13.8% decline from the prior-year quarter [1][8] Financial Performance - The company's net income attributable to shareholders was $140 million, down 14.5% year over year [2] - Quarterly net revenues totaled $535.2 million, a decline of 3.6% year over year, but exceeded the Zacks Consensus Estimate of $517.9 million [3] - Net interest income increased by 10.8% year over year to $328.2 million, with the net interest margin expanding by 24 basis points to 2.80% [3] - Total fees and commissions decreased by 1.3% year over year to $197.3 million, primarily due to lower brokerage and trading revenues [3] Expense and Efficiency Metrics - Total operating expenses rose to $354.5 million, an increase of 5.3% year over year, mainly driven by higher personnel costs [4] - The efficiency ratio increased to 65.42% from 59.83% in the prior year, indicating a deterioration in profitability [4] Loan and Deposit Trends - As of June 30, 2025, total loans reached $24.3 billion, reflecting a 2.5% increase from the prior quarter, driven by growth in commercial real estate loans and loans to individuals [5] - Total deposits slightly declined to $38.2 billion, attributed to reduced demand and savings [5] Credit Quality and Capital Ratios - Non-performing assets decreased to $81 million, or 0.33% of outstanding loans, down from $93 million or 0.38% in the prior-year quarter [6] - The company recorded no provisions for credit losses, compared to $8 million in the prior-year quarter, with net charge-offs down 91.9% to $561 thousand [6] - As of June 30, 2025, the common equity Tier 1 capital ratio improved to 13.59%, up from 12.10% a year earlier [7] Profitability Ratios - Return on average equity was 9.70%, down from 12.79% in the year-ago quarter, while return on average assets decreased to 1.07% from 1.29% [9] Share Repurchase Activity - During the reported quarter, BOK Financial repurchased 663,298 shares at an average price of $93.99 per share [10] Overall Assessment - The solid loan balance is expected to support top-line growth, while improving asset quality is a positive factor amid a challenging operating environment; however, rising operating expenses present a near-term concern [11]

Financial Performance - Net income for Q2 2025 was $140 million, or $2.19 per diluted share[11], compared to $119.8 million, or $1.86 per diluted share in Q1 2025[11, 14] - Net interest income increased by $11.9 million sequentially to $328.2 million[37, 39] - Total fees and commissions were $197.3 million, a 7.2% decrease year-over-year[34] - The efficiency ratio was 65.4% in Q2 2025, compared to 68.3% in Q1 2025[11] Balance Sheet - Period end loans grew by $602 million, or 2.5%, to $24.3 billion[14, 15] - Period end deposits decreased slightly by 0.1% to $38.2 billion[15] - Assets under management or administration increased by $3.9 billion to $117.9 billion[16] Asset Quality - Non-performing assets, excluding government guaranteed loans, were $74 million, representing 0.31% of outstanding loans and repossessed assets[14, 27] - Net charge-offs were $561 thousand during Q2[14, 27] - The allowance for credit losses was $330 million, or 1.36% of loans at quarter end[27] Outlook - The company expects mid to upper single-digit loan growth for the full year 2025[47] - Net interest income is projected to be between $1.325 billion and $1.375 billion for 2025, assuming two 25 basis point rate cuts[47]

Core Insights - BOK Financial (BOKF) reported revenue of $535.26 million for Q2 2025, a year-over-year increase of 7.9% and exceeding the Zacks Consensus Estimate of $517.95 million by 3.34% [1] - The company's EPS for the same period was $2.19, up from $2.02 a year ago, representing a surprise of 10.61% compared to the consensus estimate of $1.98 [1] Financial Performance Metrics - Efficiency Ratio stood at 65.4%, better than the average estimate of 67.2% from two analysts [4] - Average Interest Earning Assets were $46.98 billion, surpassing the average estimate of $45.99 billion [4] - Net Charge-Offs were 0% compared to the estimated 0.1% [4] - Net Interest Margin was 2.8%, aligning with the average estimate [4] - Total Non-Interest Income was $207.1 million, exceeding the estimated $196.65 million [4] - Net Interest Income (FTE) was reported at $330.74 million, above the average estimate of $325.05 million [4] - Net Interest Income was $328.17 million, compared to the average estimate of $322.8 million [4] Stock Performance - BOK Financial shares returned +13.7% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Company Performance - BOK Financial (BOKF) reported quarterly earnings of $2.19 per share, exceeding the Zacks Consensus Estimate of $1.98 per share, and up from $2.02 per share a year ago, representing an earnings surprise of +10.61% [1] - The company posted revenues of $535.26 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.34%, compared to year-ago revenues of $496.05 million [2] - Over the last four quarters, BOK Financial has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Market Performance - BOK Financial shares have declined approximately 1% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $533.2 million, and for the current fiscal year, it is $8.13 on revenues of $2.1 billion [7] Industry Outlook - The Zacks Industry Rank for Banks - Southwest, which includes BOK Financial, is currently in the top 19% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [5][8]

[Q2 2025 Financial Highlights & CEO Commentary](index=1&type=section&id=Q2%202025%20Financial%20Highlights%20%26%20CEO%20Commentary) BOK Financial Corporation reported strong Q2 2025 results with increased net income, expanded net interest margin, broad-based fee revenue growth, and significant loan growth [Financial Highlights](index=1&type=section&id=Financial%20Highlights) BOK Financial Corporation achieved strong Q2 2025 results, marked by increased net income, expanded net interest margin, broad-based fee revenue growth, and significant loan growth Q2 2025 Key Financial Metrics (vs. Q1 2025) | Metric | Q2 2025 | Change from Q1 2025 | | :--- | :--- | :--- | | **Net Income** | $140.0 million | +$20.2 million | | **Diluted EPS** | $2.19 | +$0.33 | | **Net Interest Income** | $328.2 million | +$11.9 million | | **Net Interest Margin** | 2.80% | +2 bps | | **Fees & Commissions Revenue** | $197.3 million | +$13.2 million | | **Period End Loans** | $24.3 billion | +$602 million | | **Period End Deposits** | $38.2 billion | Relatively Unchanged | | **Net Charge-offs (annualized)** | < 0.01% | - | | **Nonperforming Assets %** | 0.33% | -0.03% | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) President and CEO Stacy Kymes highlighted the company's diverse business model, driven by accelerated loan growth, strong fee income, and continued net interest margin expansion - Key drivers for the quarter's success included: accelerated loan growth of over **$600 million**, fifth consecutive quarter of net interest income growth, core net interest margin expansion of **7 basis points**, and broad-based fee income growth with record highs in fiduciary/asset management, transaction card revenue, and deposit service charges[2](index=2&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) The company's financial performance improved due to increased net interest income, higher other operating revenue, and managed operating expenses [Net Interest Income](index=2&type=section&id=Net%20Interest%20Income) Net interest income increased by **$11.9 million** to **$328.2 million** in Q2 2025, driven by a **2 basis point** expansion in net interest margin to **2.80%** Net Interest Income and Margin (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | **Net Interest Income** | $328.2 million | $316.3 million | +$11.9 million | | **Net Interest Margin (NIM)** | 2.80% | 2.78% | +2 bps | | **Core NIM (Non-GAAP)** | 3.12% | 3.05% | +7 bps | | **Average Earning Assets** | $47.0 billion | $45.6 billion | +$1.4 billion | - The yield on average earning assets increased by **2 basis points** to **5.47%**, while total funding costs decreased by **2 basis points** to **3.40%**[5](index=5&type=chunk)[6](index=6&type=chunk) - Growth in average earning assets was primarily driven by a **$995 million** increase in average trading securities and a **$256 million** increase in average available-for-sale securities[4](index=4&type=chunk) [Other Operating Revenue](index=3&type=section&id=Other%20Operating%20Revenue) Total other operating revenue rose by **$21.1 million** to **$207.1 million**, primarily fueled by a **$13.2 million** increase in fees and commissions Fees and Commissions Revenue Breakdown (Q2 2025 vs Q1 2025) | Revenue Source | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | **Brokerage and trading** | $38.1 million | $31.1 million | +$7.1 million | | **Fiduciary and asset management** | $64.0 million | $61.0 million | +$3.0 million | | **Transaction card** | $29.6 million | $27.1 million | +$2.5 million | | **Total Fees and Commissions** | $197.3 million | $184.1 million | +$13.2 million | - Brokerage and trading revenue growth was driven by steady customer demand and higher mortgage origination volumes[8](index=8&type=chunk) - Other gains (losses), net, was a net gain of **$8.1 million**, a significant turnaround from a net loss of **$725 thousand** in the prior quarter, mainly due to gains on merchant banking and deferred compensation investments[10](index=10&type=chunk) [Operating Expenses](index=4&type=section&id=Operating%20Expenses) Total operating expenses increased by **$7.0 million** to **$354.5 million**, primarily due to higher operational losses and increased technology-related professional fees - Personnel expense was consistent at **$214.7 million**, as a seasonal decrease in payroll taxes was offset by increased deferred compensation expense and the full quarter impact of annual merit increases[12](index=12&type=chunk) - Non-personnel expenses rose by **$6.4 million**, mainly due to a **$4.1 million** increase in 'Other expense' from higher operational losses and a combined **$4.1 million** increase in professional fees and data processing for technology projects[13](index=13&type=chunk) [Balance Sheet and Credit Analysis](index=5&type=section&id=Balance%20Sheet%20and%20Credit%20Analysis) The company's balance sheet strengthened with significant loan growth, stable deposits, improved capital ratios, and exceptional credit quality [Loans](index=5&type=section&id=Loans) Total loans increased by **$602 million** (2.5% QoQ) to **$24.3 billion**, driven by strong growth in Commercial Real Estate and Loans to Individuals Loan Portfolio Composition (June 30, 2025) | Loan Category | Balance | Change from Q1 2025 | % of Total Loans | | :--- | :--- | :--- | :--- | | **Total Commercial** | $14.4 billion | -$19 million | 59% | | *Energy* | *$2.7 billion* | *-$126 million* | *11%* | | **Commercial Real Estate** | $5.5 billion | +$358 million | 23% | | **Loans to Individuals** | $4.4 billion | +$263 million | 18% | | **Total Loans** | **$24.3 billion** | **+$602 million** | **100%** | - Growth in Commercial Real Estate was led by a **$141 million** increase in industrial loans and a **$137 million** increase in multifamily loans[20](index=20&type=chunk) - The decrease in the energy portfolio, which is primarily low-risk, first-lien, reserve-based lending, brought its share of total loans down to **11%**[16](index=16&type=chunk) [Deposits](index=6&type=section&id=Deposits) Period-end deposits remained stable at **$38.2 billion**, with a slight decrease of **$36 million**, reflecting a shift from non-interest-bearing to interest-bearing accounts Period End Deposit Composition (June 30, 2025) | Deposit Type | Balance | Change from Q1 2025 | | :--- | :--- | :--- | | Demand | $8.0 billion | -$290 million | | Interest-bearing transaction | $25.8 billion | +$182 million | | Time | $3.5 billion | +$83 million | | **Total Deposits** | **$38.2 billion** | **-$36 million** | - The loan to deposit ratio was **64%** at June 30, 2025, up from **62%** at March 31, 2025[22](index=22&type=chunk) - By segment, average deposits decreased in Commercial Banking (**-$344 million**) but increased in Consumer Banking (**+$112 million**) and Wealth Management (**+$81 million**)[24](index=24&type=chunk) [Capital](index=7&type=section&id=Capital) The company's capital position strengthened, with all regulatory capital ratios remaining well above minimum requirements, and active share repurchases undertaken Key Capital Ratios (June 30, 2025 vs. March 31, 2025) | Ratio | June 30, 2025 | March 31, 2025 | Minimum Requirement (incl. buffer) | | :--- | :--- | :--- | :--- | | **Common Equity Tier 1** | 13.59% | 13.31% | 7.00% | | **Tier 1 Capital** | 13.60% | 13.31% | 8.50% | | **Total Capital** | 14.48% | 14.54% | 10.50% | | **Tangible Common Equity** | 9.63% | 9.48% | N/A | - The company repurchased **663,298 shares** of common stock for approximately **$62.3 million** during the second quarter[27](index=27&type=chunk)[25](index=25&type=chunk) [Credit Quality](index=7&type=section&id=Credit%20Quality) Credit quality continued to improve in Q2 2025, with declining nonperforming assets and historically low net charge-offs, resulting in no provision for expected credit losses - Nonperforming assets decreased to **$81 million** (**0.33%** of loans) from **$85 million** (**0.36%** of loans) in the prior quarter[28](index=28&type=chunk) - Net charge-offs were minimal at **$561 thousand**, or **0.01%** of average loans on an annualized basis[30](index=30&type=chunk) - The combined allowance for loan losses and off-balance sheet credit risk was **$330 million**, representing **1.36%** of outstanding loans and **456%** of nonaccruing loans (excluding government-guaranteed loans)[31](index=31&type=chunk) [Securities & Derivatives](index=8&type=section&id=Securities%20%26%20Derivatives) The available-for-sale securities portfolio increased to **$13.3 billion** with narrowing unrealized losses, while the trading securities portfolio stood at **$5.6 billion** - The AFS portfolio, primarily consisting of U.S. government agency-backed mortgage securities, grew to **$13.3 billion**[32](index=32&type=chunk) - The trading securities portfolio, held to support customer sales, totaled **$5.6 billion** at quarter-end[33](index=33&type=chunk) - The net economic benefit from changes in the fair value of mortgage servicing rights and their related hedges was **$1.6 million** during the quarter[36](index=36&type=chunk) [Segment Performance](index=8&type=section&id=Segment%20Performance) Each segment demonstrated positive contributions, with Wealth Management showing significant growth, Consumer Banking improving profitability, and Commercial Banking maintaining stable performance [Commercial Banking](index=8&type=section&id=Commercial%20Banking) The Commercial Banking segment's net income before taxes increased by **$1.6 million** to **$141.6 million**, with stable revenue and a modest expense increase Commercial Banking Q2 2025 Highlights | Metric | Q2 2025 | Change from Q1 2025 | | :--- | :--- | :--- | | **Net Income Before Taxes** | $141.6 million | +$1.6 million | | **Average Loans** | $19.9 billion | -$71 million | | **Average Deposits** | $17.4 billion | -$344 million | [Consumer Banking](index=8&type=section&id=Consumer%20Banking) Consumer Banking contributed **$24.7 million** to net income before taxes, a **$2.6 million** increase, driven by decreased operating expenses and growth in loans and deposits Consumer Banking Q2 2025 Highlights | Metric | Q2 2025 | Change from Q1 2025 | | :--- | :--- | :--- | | **Net Income Before Taxes** | $24.7 million | +$2.6 million | | **Average Loans** | $2.3 billion | +$98 million | | **Average Deposits** | $8.3 billion | +$112 million | [Wealth Management](index=9&type=section&id=Wealth%20Management) The Wealth Management segment reported a strong quarter, with net income before taxes increasing by **$8.0 million** to **$40.7 million**, driven by higher revenue and asset growth Wealth Management Q2 2025 Highlights | Metric | Q2 2025 | Change from Q1 2025 | | :--- | :--- | :--- | | **Net Income Before Taxes** | $40.7 million | +$8.0 million | | **Average Loans** | $2.3 billion | +$88 million | | **Average Deposits** | $10.8 billion | +$81 million | | **Assets Under Management** | $117.9 billion | +$3.9 billion | [Financial Statements and Supplementary Data](index=10&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section provides comprehensive financial statements, quarterly trends, and reconciliations of non-GAAP measures for detailed performance analysis [Balance Sheets](index=10&type=section&id=Balance%20Sheets) The unaudited balance sheet as of June 30, 2025, shows total assets of **$51.0 billion**, driven by an increase in net loans, with total equity growing to **$5.9 billion** Key Balance Sheet Items (June 30, 2025) | Item | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Assets** | $50,998 million | $50,472 million | | Loans, net of allowance | $24,015 million | $23,412 million | | **Total Liabilities** | $45,105 million | $44,698 million | | Total Deposits | $38,246 million | $38,282 million | | **Total Equity** | $5,893 million | $5,774 million | [Income Statements](index=13&type=section&id=Income%20Statements) The unaudited income statement for Q2 2025 details a net income of **$140.0 million**, reflecting **$328.2 million** in net interest income and **$207.1 million** in other operating revenue Income Statement Summary (Three Months Ended June 30, 2025, in millions) | Item | Amount | | :--- | :--- | | Net Interest Income | $328.166 | | Provision for Credit Losses | $0 | | Total Other Operating Revenue | $207.098 | | Total Other Operating Expense | $354.503 | | Net Income Before Taxes | $180.761 | | **Net Income** | **$140.070** | [Quarterly Financial Trends](index=14&type=section&id=Quarterly%20Financial%20Trends) This section provides detailed trend data for the past five quarters, covering earnings, key ratios, capital levels, and credit quality indicators for comprehensive performance review - Quarterly trend data reveals a consistent increase in net interest income over the last five quarters, from **$296.0 million** in Q2 2024 to **$328.2 million** in Q2 2025[47](index=47&type=chunk) - Credit quality has shown significant improvement, with nonperforming assets decreasing from **$93.0 million** in Q2 2024 to **$81.1 million** in Q2 2025[62](index=62&type=chunk) - Capital ratios have steadily strengthened, with the Common Equity Tier 1 ratio rising from **12.10%** in Q2 2024 to **13.59%** in Q2 2025[48](index=48&type=chunk) [Reconciliation of Non-GAAP Measures](index=17&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles non-GAAP financial measures to GAAP, providing clearer insights into capital strength and core operational performance - The Tangible Common Equity Ratio is presented to show capital strength by eliminating intangible assets from shareholders' equity[53](index=53&type=chunk) - Pre-provision net revenue is calculated to assess the company's ability to generate earnings to cover credit losses through a credit cycle[55](index=55&type=chunk) - Net interest income and margin excluding trading activities are provided to help assess the performance of core lending and deposit activities without the volatility of trading[56](index=56&type=chunk)

Core Viewpoint - BOK Financial (BOKF) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on July 21, and if the results exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - The consensus estimate for BOK Financial's quarterly earnings is $1.98 per share, reflecting a year-over-year decrease of 2%, while revenues are projected to be $517.95 million, an increase of 4.4% from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 0.96%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for BOK Financial is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.17%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from the consensus estimate, with a positive reading being a strong predictor of an earnings beat [9][10]. - BOK Financial currently holds a Zacks Rank of 3, which complicates the prediction of an earnings beat given the negative Earnings ESP [12]. Historical Performance - In the last reported quarter, BOK Financial was expected to post earnings of $2.01 per share but delivered only $1.86, resulting in a surprise of -7.46% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Industry Comparison - Private Bancorp of America, Inc. (PBAM), another player in the Zacks Banks - Southwest industry, is expected to report earnings of $1.79 per share for the same quarter, indicating a year-over-year increase of 32.6% [18]. - PBAM's revenues are projected to be $30.5 million, up 16.4% from the previous year, but it also has a negative Earnings ESP of -2.79% despite a Zacks Rank of 2 [19][20].

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=4&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28Item%202%29) BOK Financial's Q1 2025 net income decreased to $119.8 million due to lower brokerage revenue, despite increased net interest income and an expanded net interest margin of 2.78%, with strong capital ratios Q1 2025 Key Financial Performance (vs Q4 2024) | Metric | Q1 2025 | Q4 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $119.8 million | $136.2 million | ($16.4 million) | | Diluted EPS | $1.86 | $2.12 | ($0.26) | | Net Interest Income | $316.3 million | $313.1 million | +$3.2 million | | Net Interest Margin | 2.78% | 2.75% | +3 bps | | Fees and Commissions | $184.1 million | $206.9 million | ($22.8 million) | | Period End Loans | $23.7 billion | $24.1 billion | ($0.4 billion) | | Period End Deposits | $38.3 billion | $38.2 billion | +$0.1 billion | [Performance Summary](index=4&type=section&id=Performance%20Summary) Q1 2025 net income fell to $119.8 million ($1.86/share) due to reduced brokerage revenue, despite net interest income growth and a 2.78% net interest margin, with strong capital ratios and no credit loss provision - Net interest margin expanded to **2.78%** from **2.75%** QoQ, as liabilities re-priced lower more quickly than assets[12](index=12&type=chunk) - Brokerage and trading revenue fell by **$24.4 million** QoQ due to lower trading volumes and margin compression from market volatility[12](index=12&type=chunk) - No provision for expected credit losses was necessary, as a worse economic outlook was offset by decreased loan balances and improved portfolio credit quality[12](index=12&type=chunk) - Period-end loan balances decreased by **$424 million** to **$23.7 billion**, primarily from a drop in commercial loans[12](index=12&type=chunk) - The Common Equity Tier 1 capital ratio improved to **13.31%** at March 31, 2025, from **13.03%** at December 31, 2024[13](index=13&type=chunk) [Results of Operations](index=6&type=section&id=Results%20of%20Operations) Q1 2025 results showed net interest income rising to $316.3 million, offset by a $24.0 million decrease in other operating revenue, primarily from brokerage activities, with stable operating expenses and a 22.61% effective tax rate [Reportable Segments](index=14&type=section&id=Reportable%20Segments) In Q1 2025, all three segments—Commercial Banking, Consumer Banking, and Wealth Management—experienced a decline in net income before taxes, primarily driven by reduced loan spreads, lower deposit spreads, and decreased trading volumes, respectively Net Income Before Taxes by Segment (Q1 2025 vs Q4 2024) | Segment | Q1 2025 (in thousands) | Q4 2024 (in thousands) | Change (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Commercial Banking | $139,983 | $160,393 | $(20,410) | (13)% | | Consumer Banking | $22,122 | $23,580 | $(1,458) | (6)% | | Wealth Management | $32,726 | $48,915 | $(16,189) | (33)% | | **Subtotal** | **$194,831** | **$232,888** | **$(38,057)** | **(16)%** | [Financial Condition](index=19&type=section&id=Financial%20Condition) As of March 31, 2025, total loans decreased to $23.7 billion, while deposits grew modestly, improving the loan-to-deposit ratio to 62%, with robust capital levels including a 13.31% CET1 ratio and a 1.40% allowance for credit losses [Explanation and Reconciliation of Non-GAAP Measures](index=38&type=section&id=Explanation%20and%20Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles non-GAAP measures like tangible common equity ratio, pre-provision net revenue (PPNR), and efficiency ratio to GAAP equivalents, providing additional insight into capital strength and operational performance - The tangible common equity ratio, a non-GAAP measure, is used to indicate capital strength by excluding intangible assets. It was **9.48%** at March 31, 2025, up from **9.17%** at December 31, 2024[153](index=153&type=chunk)[155](index=155&type=chunk) - Pre-provision net revenue (PPNR) is used to assess the ability to generate earnings to cover credit losses. PPNR was **$154.8 million** for Q1 2025[153](index=153&type=chunk)[156](index=156&type=chunk) - The efficiency ratio, which measures operational effectiveness, was **68.31%** for Q1 2025 compared to **65.61%** for Q4 2024[153](index=153&type=chunk)[157](index=157&type=chunk) [Market Risk](index=39&type=section&id=Market%20Risk%20%28Item%203%29) The company manages primary market risks, including interest rate risk on non-trading and trading assets, through Asset/Liability Committee oversight, economic hedges for MSRs, and VaR/SVaR for trading, with a 200 bp rate increase projected to decrease NII by $38.0 million Interest Rate Sensitivity on Net Interest Income (Next 12 Months) | Rate Change | Impact on NII (in thousands) | Impact (%) | | :--- | :--- | :--- | | +200 bp | $(38,000) | (2.76)% | | +100 bp | $(8,200) | (0.60)% | | -100 bp | $3,900 | 0.28% | | -200 bp | $12,600 | 0.92% | - The company uses VaR (Value at Risk) and SVaR (Stressed VaR) to measure and manage market risk for its trading portfolio. For Q1 2025, the average 10-day 99% VaR was **$3.4 million** and the average SVaR was **$13.2 million**[175](index=175&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) - The company has an independent Model Risk Management staff to validate models, ensuring they are conceptually sound and performing as expected[182](index=182&type=chunk) [Controls and Procedures](index=45&type=section&id=Controls%20and%20Procedures%20%28Item%204%29) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting identified during Q1 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[184](index=184&type=chunk) - No material changes to internal controls over financial reporting were identified during the first quarter of 2025[184](index=184&type=chunk) [Consolidated Financial Statements – Unaudited](index=46&type=section&id=Consolidated%20Financial%20Statements%20%E2%80%93%20Unaudited%20%28Item%201%29) This section presents BOK Financial's unaudited consolidated financial statements for Q1 2025, including Statements of Earnings, Balance Sheets, and Cash Flows, with detailed notes on accounting policies, securities, loans, derivatives, and fair value measurements [Consolidated Statements of Earnings (Unaudited)](index=46&type=section&id=Consolidated%20Statements%20of%20Earnings%20%28Unaudited%29) For Q1 2025, net income attributable to shareholders was $119.8 million ($1.86/diluted share), up from $83.7 million ($1.29/diluted share) in Q1 2024, driven by higher net interest income and no significant AFS securities loss Consolidated Earnings Summary (Three Months Ended March 31) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $316,251 | $293,572 | | Provision for credit losses | $0 | $8,000 | | Total other operating revenue | $186,041 | $161,701 | | Total other operating expense | $347,529 | $340,384 | | Net income attributable to BOKF shareholders | $119,777 | $83,703 | [Consolidated Balance Sheets (Unaudited)](index=48&type=section&id=Consolidated%20Balance%20Sheets%20%28Unaudited%29) As of March 31, 2025, total assets increased to $50.5 billion, driven by trading securities, while total loans decreased to $23.4 billion, and total deposits rose to $38.3 billion, contributing to a growth in shareholders' equity to $5.8 billion Balance Sheet Summary (in thousands) | Metric | March 31, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Total Assets | $50,472,189 | $49,685,892 | | Loans, net of allowance | $23,411,894 | $23,834,689 | | Total Deposits | $38,281,673 | $38,191,230 | | Total Liabilities | $44,697,811 | $44,134,935 | | Total Shareholders' Equity | $5,771,813 | $5,548,353 | [Notes to Consolidated Financial Statements (Unaudited)](index=51&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) These notes detail accounting policies, securities, loan portfolio analysis under CECL, derivative instruments, mortgage banking, commitments, contingencies, segment reporting, and fair value measurements, providing comprehensive financial disclosures - The company adopted ASU 2024-01 regarding stock compensation, which did not have a material effect. It is currently assessing the impact of new ASUs on income tax and expense disclosures[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Note 4 provides a detailed breakdown of the loan portfolio by type, risk grade, and vintage, and explains the methodology for the allowance for credit losses, which is based on a CECL model incorporating macroeconomic forecasts[222](index=222&type=chunk)[235](index=235&type=chunk)[242](index=242&type=chunk) - Note 11 details the fair value hierarchy (Levels 1, 2, and 3) and provides valuations for assets and liabilities measured at fair value on both a recurring (e.g., securities, derivatives) and non-recurring (e.g., collateral for nonaccruing loans) basis[304](index=304&type=chunk)[305](index=305&type=chunk)[318](index=318&type=chunk) [Quarterly Financial Summary – Unaudited](index=91&type=section&id=Quarterly%20Financial%20Summary%20%E2%80%93%20Unaudited%20%28Item%202%29) This section summarizes consolidated daily average balances for assets, liabilities, and equity, along with average yields and rates for interest-earning assets and interest-bearing liabilities, providing insight into net interest income and margin drivers Q1 2025 Average Balances and Yields/Rates | Category | Average Balance (in thousands) | Tax-Equivalent Yield/Rate | | :--- | :--- | :--- | | **Total Earning Assets** | **$45,606,324** | **5.45%** | | Loans | $24,068,227 | 6.71% | | Available-for-sale securities | $12,962,830 | 3.82% | | **Total Interest-Bearing Liabilities** | **$35,896,315** | **3.42%** | | Interest-bearing deposits | $30,203,009 | 3.24% | | Other borrowings | $4,626,402 | 4.57% | [Quarterly Earnings Trends – Unaudited](index=94&type=section&id=Quarterly%20Earnings%20Trends%20%E2%80%93%20Unaudited) This section presents a summary table of key earnings statement line items for the last five consecutive quarters (Q1 2024 through Q1 2025), facilitating trend analysis of revenues, expenses, provisions, and net income Net Income Trend (Last 5 Quarters) | Quarter | Net Income Attributable to BOKF (in thousands) | | :--- | :--- | | Q1 2025 | $119,777 | | Q4 2024 | $136,154 | | Q3 2024 | $139,999 | | Q2 2024 | $163,713 | | Q1 2024 | $83,703 | [Part II. Other Information](index=95&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=95&type=section&id=Item%201.%20Legal%20Proceedings) The company is a defendant in a class action lawsuit concerning its trustee role for municipal bonds, with a potential $31 million bondholder loss, though management believes no loss is probable - The company is a defendant in a class action lawsuit from 2016 concerning its role as a trustee for municipal bonds where an employee violated policies. The action remains stayed[277](index=277&type=chunk) - Management believes no loss is probable, but if it were, the estimated outstanding bond amount is approximately **$31 million**, which could be material[279](index=279&type=chunk) [Risk Factors](index=95&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K were reported - No material changes from the risk factors disclosed in the 2024 Form 10-K were reported[330](index=330&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased 10,000 shares at an average price of $98.45 under its public repurchase plan, with 1,532,980 shares remaining available under the current authorization - In Q1 2025, the company repurchased **10,000 shares** of its common stock at an average price of **$98.45** per share under its public repurchase program[332](index=332&type=chunk) - As of March 31, 2025, **1,532,980 shares** may yet be purchased under the existing five-million-share repurchase authorization from November 2022[332](index=332&type=chunk) [Other Information](index=95&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated Rule 10b5-1 trading plans during Q1 2025, though some participate in dividend reinvestment and 401(k) plans - No director or officer adopted, modified, or terminated any Rule 10b5-1 trading plans during Q1 2025[333](index=333&type=chunk) [Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and interactive data files (Inline XBRL) - Exhibits filed include CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906[335](index=335&type=chunk) - Interactive data files (XBRL) are included as Exhibit 101[335](index=335&type=chunk) [Signatures](index=97&type=section&id=Signatures) The report is signed on April 30, 2025, by Martin E. Grunst, EVP and CFO, and Michael J. Rogers, SVP and Chief Accounting Officer, for BOK Financial Corporation

Financial Data and Key Metrics Changes - The company reported earnings of $119.8 million, or EPS of $1.86 per diluted share for Q1 2025 [6] - Total capital levels improved, with TCE reaching 9.5% and CET1 at 13.3% [8] - Net interest income increased by $3.2 million, and net interest margin expanded by three basis points [32] Business Line Data and Key Metrics Changes - Total fee income decreased by $22.8 million on a linked quarter basis, contributing $184.1 million to revenue [26] - Trading revenue was $23.3 million, down from $37.7 million in the prior quarter, with $10.6 million of fee revenue shifting to net interest income [28] - Mortgage banking revenue grew by 1.7% linked quarter, reaching $19.8 million [30] Market Data and Key Metrics Changes - Loan balances in the energy business decreased by 12.1% quarter-over-quarter [15] - The core C&I loan portfolio contracted by only 0.7%, but showed a year-over-year growth of 4.2% [17] - Commercial real estate loans increased by 2.1% quarter-over-quarter, primarily from multifamily housing and industrial projects [19] Company Strategy and Development Direction - The company aims to produce long-term, sustainable value for shareholders and has a disciplined approach to credit [11] - Plans to expand into the mortgage finance and warehouse lending business, with a launch expected in September to October [20] - The company is focused on maintaining strong credit quality and managing risks effectively [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating through market volatility and expects trading revenue to rebound in Q2 [45][46] - There is optimism regarding loan growth, particularly in the mortgage finance sector, despite some uncertainty in borrower behavior [60][64] - Credit quality remains strong, with minimal net charge-offs and a healthy allowance for credit losses [24] Other Important Information - Non-performing assets increased to $79 million, but this remains low compared to historical levels [22] - The company has a strong liquidity position, with a loan-to-deposit ratio of 62%, one of the lowest in its peer group [9] Q&A Session Summary Question: Trading income dynamics and future expectations - The decline in trading revenue was entirely volume-driven, and a rebound is expected in Q2 [45] Question: Pressure on energy and healthcare loan balances - Management believes the pressure on energy loans is nearing its end, with positive early trends in April [50][51] Question: Provision guidance and loan growth - The company does not expect to grow the allowance for credit losses ratio over the year, given current credit quality [54] Question: Loan growth outlook and mortgage finance business - Pipelines are strong, and the mortgage finance business is expected to contribute positively to loan growth [60][64] Question: Flexibility in managing expenses - The company has flexibility to manage expenses based on revenue fluctuations, particularly in trading and investment banking [78][81] Question: Deposit growth outlook and funding costs - The company expects deposits to grow throughout the year, with a strong loan-to-deposit ratio allowing for continued deposit pricing management [90][93] Question: Energy portfolio and hedging activity - Current energy borrowers are well-hedged, and lower commodity prices may not significantly impact loan performance [98][100] Question: Trading interest revenue and future spreads - Guidance assumes that trading spreads will improve with potential rate cuts later in the year [124]

Core Viewpoint - BOK Financial Corporation (BOKF) reported lower-than-expected first-quarter 2025 results, with earnings of $1.86 per share, missing the Zacks Consensus Estimate of $2.01, although the earnings grew 44.2% year-over-year [1][2] Financial Performance - Net income attributable to shareholders was $119.8 million, reflecting a year-over-year increase of 43.1% [2] - Quarterly net revenues reached $502.3 million, a 10.3% increase year-over-year, but fell short of the Zacks Consensus Estimate of $518.5 million [3] - Net interest income was $316.3 million, up 7.7%, with the net interest margin expanding by 17 basis points to 2.78% [3] - Total fees and commissions decreased to $184.1 million, down 8.2%, primarily due to lower brokerage and trading revenues [3] Expense and Efficiency - Total other operating expenses were $347.5 million, an increase of 2.1% year-over-year, mainly driven by higher personnel expenses [4] - The efficiency ratio rose to 68.31% from 67.13% in the prior year, indicating a deterioration in profitability [4] Loan and Deposit Trends - Total loans as of March 31, 2025, were $23.7 billion, down 1.8% from the prior quarter, primarily due to a decline in commercial loans [5] - Total deposits increased by 1.4% sequentially to $38.4 billion, driven by interest-bearing transaction deposits and savings [5] Credit Quality - Non-performing assets decreased to $85 million, or 0.36% of outstanding loans, down from $122.4 million, or 0.51%, in the prior-year quarter [6] - The company recorded no provisions for credit losses compared to $8 million in the prior-year quarter, with net charge-offs of $1.1 million, down 79.8% [6] Capital and Profitability Ratios - As of March 31, 2025, the common equity Tier 1 capital ratio improved to 13.31% from 11.99% a year earlier [7] - Return on average equity was 8.59%, up from 6.53% in the previous year, while return on average assets increased to 0.95% from 0.67% [7] Share Repurchase Activity - During the reported quarter, BOK Financial repurchased 10,000 shares for $0.99 million [8] Market Position - The company maintains a solid loan and deposit balance, which is expected to support top-line growth, alongside improving asset quality amid a challenging operating environment [9]