BOK Financial(US:BOKF)2025-02-19 19:07Financial Performance - Net income for the year ended December 31, 2024, totaled $523.6 million, or $8.14 per diluted share, compared to $530.7 million, or $8.02 per diluted share, for 2023[144]. - Net interest income for 2024 was $1.2 billion, a decrease of $61.4 million compared to the prior year, with a net interest margin of 2.65%[144]. - Fees and commissions revenue grew to $810.0 million for 2024, an increase of $28.9 million over 2023, driven by fiduciary and asset management revenue growth of $23.5 million[144]. - Other gains, net, were $79.7 million for 2024, including a $56.9 million pre-tax gain from Visa C shares received[144]. - Losses on available for sale securities totaled $45.8 million for 2024, compared to $30.6 million in the prior year[144]. - Other operating expenses increased by $32.9 million to $1.4 billion, with personnel expenses growing by $44.6 million[144]. - The return on average assets was 1.03% for 2024, down from 1.10% in 2023[140]. - The return on average shareholders' equity was 9.82% for 2024, compared to 10.82% in 2023[140]. - The dividend payout ratio was 27.20% for 2024, slightly up from 27.00% in 2023[140]. - The provision for credit losses was $18.0 million in 2024, with net charge-offs of $12.9 million or 0.05% of average loans, compared to $18.1 million or 0.08% in 2023[146]. Assets and Liabilities - Total assets as of December 31, 2024, amount to $50,749,498, with total earning assets at $45,538,838 generating net interest income of $1,210,758[168]. - Total interest-bearing liabilities amount to $35,538,618, with a net interest income to earning assets ratio of 2.65%[168]. - The tangible common equity ratio improved to 9.17% at December 31, 2024, up from 8.29% at December 31, 2023[146]. - Average outstanding loan balances increased by $1.0 billion to $24.2 billion, driven by a $741 million increase in commercial loans and a $394 million increase in loans to individuals[146]. - Average deposits rose by $3.1 billion to $36.3 billion, with average interest-bearing deposits increasing by $5.4 billion[146]. Revenue Streams - Mortgage production revenue for 2024 was $8.739 million, a significant increase from a loss of $5.339 million in 2023[194]. - Total mortgage production volume reached $814.070 million in 2024, up from $655.682 million in 2023, representing a 24% increase[194]. - Mortgage servicing revenue increased to $65.368 million in 2024, compared to $61.037 million in 2023, reflecting a 7% growth[194]. - Brokerage and trading revenue decreased by $22.5 million, or 9%, to $218.1 million in 2024 compared to 2023[180]. - Transaction card revenue increased by $2.0 million, or 2%, totaling $108.9 million in 2024[186]. - Fiduciary and asset management revenue rose by $23.5 million, or 11%, reaching $230.9 million in 2024[188]. - Deposit service charges and fees increased by $10.2 million, or 9%, totaling $118.7 million in 2024[192]. - Customer hedging revenue decreased by $8.8 million, or 24%, totaling $27.7 million in 2024[182]. - Investment banking fees increased by $6.1 million, or 14%, totaling $49.1 million in 2024[183]. - Retail brokerage revenue increased by $3.5 million, or 22%, totaling $19.4 million in 2024[184]. Operational Insights - BOK Financial employs 5,056 full-time and part-time employees, with the majority being full-time[30]. - The company operates three principal segments: Commercial Banking, Consumer Banking, and Wealth Management[24]. - The company continues to evaluate and deploy emerging technologies like AI, which present both opportunities and regulatory compliance challenges[103]. - The company is heavily reliant on third-party vendors for critical infrastructure, which poses risks of operational errors and system interruptions[104]. - Cybersecurity risks have increased significantly, necessitating robust risk management programs to protect customer data and maintain operational integrity[99]. - The company has not experienced material losses from cyber attacks to date, but the risk remains heightened, and ongoing investment in cybersecurity measures is a priority[102]. Market Position and Strategy - The company holds 14% of total deposits in Oklahoma, with 30% market share in Tulsa and 13% in Oklahoma City[27]. - BOK Financial's acquisition strategy targets quality organizations with solid growth to supplement its principal lines of business[20]. - The company has a market share of approximately 1% in the Dallas-Fort Worth area and less than 1% in Houston[28]. - BOK Financial does not engage in foreign operations or lend to foreign governments, focusing solely on domestic markets[69]. - The company is subject to regulatory scrutiny regarding acquisitions and investments, which could limit growth opportunities[75]. Regulatory Environment - The company is subject to extensive regulations under federal and state laws, including the Dodd-Frank Act[32]. - The CFPB finalized a rule regulating overdraft fees, allowing institutions to cap fees at $5 or cover actual costs, effective October 1, 2025[46]. - BOKF, NA received an "outstanding" rating in its most recent CRA examination, exceeding the "satisfactory" requirement for new activities[46]. - The FDIC approved a special assessment of 3.36 basis points on certain banking organizations with over $5 billion in assets to recover costs from protecting uninsured depositors[56]. - The FDIC's plan aims to restore the DIF reserve ratio to at least 1.35% by September 30, 2028, with increased deposit insurance assessment rates effective January 1, 2023[55]. - Regulatory changes and compliance costs may increase as BOK Financial's asset size grows above $50 billion, impacting future growth potential[76]. Economic Factors - The unemployment rate increased slightly to 4.0% in December 2024, indicating ongoing economic challenges[66]. - The base case economic forecast predicts inflation will reach 2.4% by the end of 2025, with two additional federal funds rate cuts anticipated[67]. - BOK Financial's operations are influenced by regulatory policies, particularly those of the Federal Reserve, which aim to maximize employment and maintain price stability[65]. - The recent downgrade of the U.S. long-term credit rating from AAA to AA+ by Fitch Ratings could have material adverse impacts on financial markets and economic conditions[78]. - Prolonged inflation could negatively impact profitability by increasing funding costs and reducing consumer purchasing power, affecting demand for products and services[112]. Funding and Interest Rate Risks - Fluctuations in interest rates significantly affect BOK Financial's ability to originate new loans and manage net interest income[88]. - The company relies on external funding sources, and disruptions in the market could impair its ability to access necessary capital[94]. - Changes in mortgage interest rates directly impact BOK Financial's mortgage banking operations and revenue from mortgage servicing rights[89]. - Increased funding costs if deposits are lost or if there is a shift in deposit mix could negatively impact net interest margin and net income[95]. - Average interest-bearing deposits increased by $954 million, primarily from interest-bearing transaction accounts[171].