BOK Financial Corporation reports quarterly earnings of $164 million, or $2.54 per share, in the second quarter. 1 | --- | --- | --- | |----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------- ...

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. The consensus EPS estimate for the quarter has been revised 1.56% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. The Zacks Earni ...

When looking at the last two reports, this Regional banking operator has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 7.27%, on average, in the last two quarters. For the last reported quarter, BOK Financial came out with earnings of $1.91 per share versus the Zacks Consensus Estimate of $1.72 per share, representing a surprise of 11.05%. For the previous quarter, the company was expected to post earnings of $1.72 per share and it actually produced earnings ...

BOK Financial has an encouraging credit quality metrics. The company has been witnessing a sharp decline in its non-performing assets as well as net charge-offs (NCOs) in the past. The metrics have been better than the pre-pandemic levels. With a history of outperformance during credit cycles, BOK Financial is believed to be well-positioned amid expectations of an economic slowdown. Shares of the company have gained 4.3% over the past six months against the industry's decline of 10.2%. Image Source: Zacks I ...

Core Insights - The article emphasizes the importance of a ranking system that focuses on earnings estimates and revisions to identify winning stocks, while also considering various investment strategies such as value, growth, and momentum [1][2] Company Analysis - BOK Financial (BOKF) is highlighted as a stock to watch, currently holding a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4][7] - BOKF has a P/E ratio of 11.04, which is lower than the industry average of 11.74, suggesting it may be undervalued compared to its peers [4] - The stock's Forward P/E has fluctuated between 7.57 and 12.27 over the past year, with a median of 10.54, indicating variability in market perception [4] - BOKF's P/B ratio stands at 1.10, which is favorable compared to the industry average of 1.66, further supporting the notion of undervaluation [5] - The P/B ratio has ranged from 0.87 to 1.25 in the past 52 weeks, with a median of 1.11, reflecting stability in its valuation metrics [5] - The P/CF ratio for BOKF is 10.44, which is attractive compared to the industry average of 13.46, reinforcing its undervalued status based on cash flow [6] - The P/CF ratio has seen a range from 5.89 to 11.48 over the past year, with a median of 7.99, indicating a solid cash outlook [6] - Overall, BOKF's strong value metrics and positive earnings outlook position it as an impressive value stock at the moment [7]

Core Viewpoint - The Zacks rating system effectively utilizes earnings estimate revisions to predict near-term stock price movements, making it a valuable tool for investors [2][7]. Group 1: Zacks Rating System - The Zacks rating system maintains an equal distribution of 'buy' and 'sell' ratings across over 4000 stocks, with only the top 20% receiving favorable ratings [3]. - A stock's placement in the top 20% indicates strong earnings estimate revisions, suggesting potential for market-beating returns [3][15]. - The Zacks Rank stock-rating system has a proven track record, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [12]. Group 2: BOK Financial Analysis - BOK Financial (BOKF) has been upgraded to a Zacks Rank 2 (Buy) due to a positive trend in earnings estimates, which is a significant factor influencing stock prices [4][5]. - Over the past three months, the Zacks Consensus Estimate for BOK Financial has increased by 0.5% [8]. - The upgrade reflects an improvement in BOK Financial's underlying business, which is expected to drive the stock price higher [11][15]. Group 3: Earnings Estimate Revisions Impact - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [6]. - Tracking earnings estimate revisions can be a rewarding strategy for investment decisions, highlighting the importance of the Zacks Rank system [7].

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=3&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) BOK Financial's Q1 2024 net income slightly increased, impacted by a securities portfolio loss and FDIC assessment, alongside loan and deposit growth [Performance Summary](index=3&type=section&id=Performance%20Summary) BOK Financial's Q1 2024 net income slightly increased to $83.7 million, despite a securities portfolio loss, alongside loan and deposit growth and strong capital Q1 2024 Key Financial Results | Metric | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | | Net Income | $83.7 million | $82.6 million | | Diluted EPS | $1.29 | $1.26 | | Adjusted Net Income (Non-GAAP) | $123.2 million | N/A | | Adjusted EPS (Non-GAAP) | $1.91 | N/A | - The company recorded a **$45.2 million loss** from repositioning its available for sale securities portfolio by selling approximately **$783 million** of lower-yielding debt securities[5](index=5&type=chunk) - An expected gain from the conversion of Visa Class B shares is anticipated to offset the realized losses from the securities portfolio repositioning[5](index=5&type=chunk)[43](index=43&type=chunk) Balance Sheet and Capital Highlights (as of March 31, 2024) | Metric | Value | Change from Q4 2023 | | :--- | :--- | :--- | | Period End Loans | $24.2 billion | +$268 million | | Period End Deposits | $35.4 billion | +$1.4 billion | | Assets Under Management | $105.5 billion | +$794 million | | Common Equity Tier 1 Capital Ratio | 11.99% | -7 bps | - The company repurchased **616,630 shares** of common stock at an average price of **$83.89 per share** during the first quarter of 2024[44](index=44&type=chunk) [Results of Operations](index=5&type=section&id=Results%20of%20Operations) Operating results showed declining net interest revenue from margin compression, a $45.2 million securities loss impacting other revenue, and lower expenses due to reduced FDIC assessment - Tax-equivalent net interest revenue decreased by **$3.1 million** quarter-over-quarter to **$295.7 million**, driven by a **3 basis point decline** in net interest margin to **2.61%**[5](index=5&type=chunk)[17](index=17&type=chunk) - Other operating revenue decreased by **$43.2 million** from the prior quarter, mainly due to a **$45.2 million loss** on repositioning the AFS securities portfolio and the absence of a **$31.0 million gain** on the sale of BOKFI that was recognized in Q4 2023[19](index=19&type=chunk) - Total other operating expense decreased by **$43.7 million** quarter-over-quarter, largely because Q4 2023 included a **$43.8 million FDIC special assessment**, while Q1 2024 included a smaller, additional assessment of **$6.5 million**[5](index=5&type=chunk)[53](index=53&type=chunk) [Lines of Business](index=13&type=section&id=Lines%20of%20Business) Commercial Banking's net income decreased by 10%, Consumer Banking remained stable, and Wealth Management's net income fell 46% due to a prior quarter gain Net Income by Line of Business (in thousands) | Line of Business | Q1 2024 | Q4 2023 | % Change | | :--- | :--- | :--- | :--- | | Commercial Banking | $153,250 | $171,084 | (10)% | | Consumer Banking | $53,804 | $53,695 | 0% | | Wealth Management | $34,165 | $62,690 | (46)% | | **Subtotal** | **$241,219** | **$287,469** | **(16)%** | - Commercial Banking's net income decreased by **$17.8 million**, or **10%**, compared to Q4 2023[33](index=33&type=chunk) - Consumer Banking's net income remained consistent with the prior quarter, with increased mortgage banking revenue offsetting a decline in net interest revenue[36](index=36&type=chunk)[86](index=86&type=chunk) - Wealth Management's net income decreased by **$28.5 million**, or **46%**, largely because Q4 2023 included a **$31.0 million pre-tax gain** on the sale of BOKFI[37](index=37&type=chunk) [Financial Condition](index=19&type=section&id=Financial%20Condition) As of March 31, 2024, the company's financial condition remained solid, with loan growth to $24.2 billion, deposits increasing by $1.4 billion, and strong capital ratios - The loan portfolio grew by **$268 million** to **$24.2 billion** at March 31, 2024, driven by growth in commercial loans, partially offset by a reduction in commercial real estate loans[67](index=67&type=chunk) - The combined allowance for credit losses was **$329 million**, or **1.36%** of outstanding loans, consistent with the prior quarter-end[15](index=15&type=chunk) - Period-end deposits increased by **$1.4 billion** to **$35.4 billion** compared to December 31, 2023[15](index=15&type=chunk) - The company's capital ratios remain strong, with a Common Equity Tier 1 capital ratio of **11.99%** and a total capital ratio of **13.15%** at March 31, 2024[44](index=44&type=chunk)[143](index=143&type=chunk) [Market Risk](index=40&type=section&id=Market%20Risk) The company manages interest rate risk, its primary market risk, with an asset-sensitive balance sheet, and also mitigates MSR and trading risks using VaR and stress testing Interest Rate Sensitivity on Net Interest Revenue (Next 12 Months) | Rate Shock | Estimated Impact on NIR | % Change | | :--- | :--- | :--- | | +200 bp | ($29.9 million) | (2.31)% | | +100 bp | ($4.6 million) | (0.35)% | | -100 bp | ($2.5 million) | (0.20)% | | -200 bp | $0.9 million | 0.07% | - The company manages market risk from changes in the fair value of its Mortgage Servicing Rights (MSRs) through an economic hedge portfolio. A **50 basis point increase** in rates is estimated to have a net negative exposure of **$291 thousand** on the MSR portfolio and its hedge[127](index=127&type=chunk)[149](index=149&type=chunk) - For trading activities, the company uses Value at Risk (VaR) and Stressed VaR (SVaR) to measure potential losses. For Q1 2024, the average 10-day 99% VaR was **$5.1 million**[127](index=127&type=chunk)[152](index=152&type=chunk) [Controls and Procedures](index=44&type=section&id=Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[130](index=130&type=chunk) - No changes during the quarter were identified that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[130](index=130&type=chunk) [Consolidated Financial Statements – Unaudited](index=45&type=section&id=Consolidated%20Financial%20Statements%20%E2%80%93%20Unaudited) This section presents BOK Financial's unaudited consolidated financial statements as of March 31, 2024, including statements of earnings, balance sheets, and cash flows, with detailed notes Consolidated Statement of Earnings Highlights (Three Months Ended Mar 31) | (In thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Interest Revenue | $293,572 | $352,348 | | Provision for Credit Losses | $8,000 | $16,000 | | Total Other Operating Revenue | $161,701 | $177,865 | | Total Other Operating Expense | $340,384 | $305,812 | | **Net Income** | **$83,694** | **$162,496** | Consolidated Balance Sheet Highlights | (In thousands) | Mar 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $50,160,380 | $49,824,830 | | Loans, net | $23,890,937 | $23,627,845 | | Total Deposits | $35,383,547 | $34,019,701 | | Total Shareholders' Equity | $5,128,751 | $5,142,442 | [Part II. Other Information](index=93&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=93&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in litigation as Indenture Trustee for municipal bonds, but management does not expect a material effect on financial condition or results - BOKF, NA is subject to litigation concerning its role as Indenture Trustee for municipal bonds where Christopher Brogdon was the borrower. Claimants allege complicity in fraud[248](index=248&type=chunk) - Management is advised that a loss on these claims is not probable and does not expect the final outcomes to have a material effect on the company's financials[248](index=248&type=chunk) [Risk Factors](index=93&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported from the risk factors previously disclosed in the company's Annual Report on Form 10-K for 2023 - No material changes were reported from the risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2023[296](index=296&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2024, the company repurchased 651,850 shares of common stock, with 616,630 shares under its publicly announced repurchase program Share Repurchases in Q1 2024 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | | :--- | :--- | :--- | :--- | | Jan 2024 | 79,534 | $88.22 | 44,630 | | Feb 2024 | 425,000 | $82.73 | 425,000 | | Mar 2024 | 147,316 | $86.50 | 147,000 | | **Total** | **651,850** | **N/A** | **616,630** |

BOK Financial Corporation’s (BOKF) first-quarter 2024 adjusted earnings per share (EPS) of $1.91 beat the Zacks Consensus Estimate of $1.72. The bottom line compared unfavorably with earnings of $2.43 per share reported a year ago.Shares of BOKF have gained 2.1% following the release of its higher-than-expected quarterly performance.The results benefited from a rise in total fees and commissions, higher loans and deposit balances. Moreover, a decline in provisions was another positive. However, lower net in ...

Financial Data and Key Metrics Changes - The company reported earnings of $83.7 million or EPS of $1.29 per diluted share, with adjusted net income of $123.2 million and EPS of $1.91 per share after notable items [94] - First quarter net interest income was $293.6 million, with a linked quarter decrease of $3.1 million, and net interest margin at 2.61%, a 3 basis point decrease compared to Q4 [13][118] - Total fee income contributed $200.6 million, representing 41% of total revenue [114] Business Line Data and Key Metrics Changes - Healthcare business loans increased by 2.5% linked quarter, with a diversified portfolio primarily in senior housing [6] - Mortgage banking revenue increased by 48% to $19 million, driven by improvements in the mortgage origination market [10] - Commercial loans grew by 2.2% linked quarter, while commercial real estate (CRE) loans decreased by 1.9% [137] Market Data and Key Metrics Changes - The company operates in dynamic, high-growth markets, maintaining a loan-to-deposit ratio of 68%, which is below peers, providing significant liquidity [97] - Non-performing assets decreased by $25 million this quarter, with non-performing assets to period end loans decreasing to 51 basis points [7][101] Company Strategy and Development Direction - The company focuses on long-term profitability and sustainable value creation, with a diversified loan portfolio and strong credit quality [105] - Investments in high ROE fee income businesses have contributed to revenue diversity, with 41% of revenue coming from these businesses [9] - The company has a commercial real estate concentration limit of 185% of total commitments versus tier one capital, currently at approximately 22% [107] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong credit quality and expects to outperform peers in challenging credit cycles [96] - The company anticipates total loan growth of 5% to 7% for 2024, with net interest margin expected to stabilize and increase later in the year [118] - Management noted that while there are uncertainties in commercial real estate, they remain optimistic about overall commercial growth [17] Other Important Information - The company repurchased over 616,000 shares this quarter, reflecting long-term confidence in the company [108] - A special assessment of $6.5 million from the FDIC is expected in June, following a previous assessment of $43.8 million [116] Q&A Session Summary Question: Can you provide more color on criticized and problem loans? - Management indicated that there are no systemic issues in any particular portfolio, and they have effectively managed criticized and classified loans [20] Question: What is the outlook for net charge-offs in the second half of the year? - Management does not anticipate higher net charge-offs, expecting consistency with recent quarters based on current credit quality [127] Question: How is the competitive landscape in core lending businesses? - Management noted that regional banks are starting to re-enter the market, but the company has benefited from competitors pulling back [64] Question: What drove the notable deposit growth this quarter? - The company attributed deposit growth to proactive offers to existing customers and effective management of liquid assets [161] Question: How does the company view the impact of potential rate cuts on margins? - Management believes that the margin has reached its trough and expects stability and potential increases later in the year, regardless of rate cuts [132]

BOK Financial (BOKF) reported $455.27 million in revenue for the quarter ended March 2024, representing a year-over-year decline of 14.1%. EPS of $1.91 for the same period compares to $2.43 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $473.7 million, representing a surprise of -3.89%. The company delivered an EPS surprise of +11.05%, with the consensus EPS estimate being $1.72.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- a ...