BOK Financial Thrives on Loan & Credit Quality Amid Rising Expenses

Core Viewpoint - BOK Financial Corporation (BOKF) is positioned for organic growth due to steady loan demand, robust deposit balances, and solid credit quality, although rising expenses are a concern [1]. Factors Aiding BOKF - Loan & Deposits Growth: BOKF has experienced continuous loan growth with a compound annual growth rate (CAGR) of 2% from 2018 to 2024, despite a decline in 2021. Deposits have shown a rising trend with a six-year CAGR of 7.1% [2]. - Improving Asset Quality: The company has seen a significant decline in non-performing assets with a negative CAGR of 24.6% over five years, and net charge-offs (NCOs) have also decreased with a negative CAGR of 40.9% during the same period [3]. - Steady Capital Distribution: BOKF has consistently increased dividends, with a 3.6% hike to 57 cents per share in October 2024. The company also has a share repurchase authorization of 5 million shares, with 1.54 million shares remaining as of December 31, 2024 [4]. What's Hurting BOK Financial - Escalating Expenses: Operating expenses have risen with a CAGR of 3.4% over the last six years, driven by investments in technology and increased employee compensation [5]. - Loan Concentration: A significant portion of BOKF's loan portfolio consists of commercial loans, which make up 62.3% of total loans as of December 31, 2024. This concentration may pose risks if the economic environment deteriorates [6]. BOKF Price Performance & Zacks Rank - BOKF shares have increased by 29.1% over the past year, slightly outperforming the industry average of 28.8% [7]. The company currently holds a Zacks Rank of 1 (Strong Buy) [9]. Peers Worth Considering - Other top-ranked bank stocks include BancFirst Corporation (BANF) and Cullen/Frost Bankers, Inc. (CFR), both of which have seen upward revisions in earnings estimates and significant share price gains over the past year [10][11].