ZACKS·2025-12-31 16:56Core Insights - BOK Financial Corporation (BOKF) shares have increased by 17.9% over the past six months, significantly outperforming the industry growth of 3% and its peers, First Horizon Corporation (FHN) and Cullen/Frost Bankers, Inc. (CFR) [1][8] Performance Overview - The Zacks Consensus Estimate for BOKF's earnings for 2025 and 2026 has been revised upward, indicating a 1.1% and 7.7% rise respectively, reflecting analyst optimism about the company's future earnings [4][5][8] Growth Drivers - BOKF has experienced stable organic growth with a compound annual growth rate (CAGR) of 2% in loans over the six years ending in 2024, supported by a diversified business model and increased lending activity [9] - Deposits have also shown consistent growth, achieving a CAGR of 7.1% over the same period, bolstered by a balanced mix of commercial, consumer, wealth, and small business deposits [12] - The company expects loan growth of 5–7% in 2025, compared to $24.1 billion reported at the end of 2024, driven by a strong loan pipeline and rising deposit balances [15][16] Financial Metrics - BOKF's net interest income (NII) has benefited from higher interest rates, achieving a four-year CAGR of 2.8% through 2024, with continued growth in the first nine months of 2025 [17] - Despite a decline in net interest margin (NIM) to 2.75% in 2024 from 2.93% in 2023, NIM showed modest expansion in the first nine months of 2025 due to easing funding costs and improved asset yields [18] Asset Quality - The company has demonstrated strong improvement in asset quality, with non-performing assets declining at a CAGR of 24.6% over the five years ending in 2024, continuing to decline in the first nine months of 2025 [20] - Net charge-offs have recorded a five-year negative CAGR of 40.9% through 2024, indicating a resilient balance sheet capable of navigating potential economic slowdowns [21] Strategic Expansion - BOKF has strategically expanded into key neighboring markets, including a new office in Memphis, TN, and an expansion into the San Antonio market, enhancing its competitive standing [22][23] Capital Distribution - The company has a disciplined capital distribution strategy, raising its quarterly dividend by 3.6% to 57 cents per share in October 2024, with a current dividend yield of 2.11% [24][28] Near-Term Concerns - Rising operating expenses have recorded a CAGR of 3.4% over the six years ended 2024, expected to remain elevated due to ongoing investments in technology and higher employee-related compensation [29] - The company's liquidity position is relatively low compared to its elevated debt levels, with total debt of $4.2 billion against cash and equivalents of $1.4 billion as of September 30, 2025 [30] Valuation - BOKF stock is currently trading at a 12-month trailing price-to-earnings (P/E) ratio of 13.34X, higher than the industry's 12.98X, indicating a premium valuation [31] Conclusion - Despite near-term concerns, BOKF's consistent loan and deposit growth, improving asset quality, and favorable earnings estimate revisions suggest a well-run, growth-oriented bank with strong fundamentals and shareholder-friendly policies [34]