BOK Financial(US:BOKF)2026-01-20 19:00Financial Data and Key Metrics Changes - The company reported earnings of $177.3 million, or EPS of $2.89 per diluted share for Q4 2025, with full-year earnings reaching $578 million, or $9.17 per diluted share, marking record highs for both the quarter and the year [3][4] - Loan balances expanded by more than $1.5 billion, or 6.4% for the year, with a sequential growth of $786 million, or 3.2% in Q4 [3][5] - Net interest income increased by $7.6 million, with net interest margin expanding by seven basis points [12][4] Business Line Data and Key Metrics Changes - The fee income engine contributed $801 million to revenue, representing 38% of total revenue, with total fee income increasing by 5.1% sequentially [4][10] - The core C&I loan portfolio grew by 5.5% sequentially, while healthcare loans increased by 3.3% and energy loans grew by over $200 million [6][7] - Commercial real estate loans decreased by 1.4% quarter-over-quarter but increased by 12.1% year-over-year [7] Market Data and Key Metrics Changes - The company outperformed the KBWF Regional Bank Index in total shareholder return over one, three, five, and ten-year periods by 7%, 3%, 42%, and 51% respectively [4] - The capital levels remained robust, with tangible common equity at 9.5% and CET1 at 12.9% [6] Company Strategy and Development Direction - The company aims for upper single-digit loan growth in 2026, reflecting continued growth in the existing portfolio and contributions from the new mortgage finance segment [15] - The strategy includes maintaining a disciplined approach to risk management while investing in long-term sustainable shareholder value [3][4] - The company is opportunistic regarding share buybacks and M&A opportunities, focusing on intrinsic strategic value [81][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current environment and capitalize on market disruptions [89] - The outlook for credit quality remains strong, with expectations of net charge-offs remaining below historical norms [9][56] - Management anticipates that credit normalization will occur over the long term, but no immediate concerns are evident [9][56] Other Important Information - The company repurchased over 2.6 million shares at an average price of $107.99 per share during the quarter [6] - A notable pre-tax gain of $23.5 million was recognized from exiting a merchant banking investment [13] Q&A Session Questions and Answers Question: Can you provide more detail on the drivers of upper single-digit loan growth? - Management noted that loan growth has been diverse across geography and lending types, with significant contributions from various segments, including a $100 million increase from the mortgage finance business in Q4 [20] Question: How are you thinking about future share buybacks? - Management indicated that share buybacks are opportunistic and linked to the company's long history of shareholder value orientation [22] Question: Can you discuss the competition for deposits and the outlook for deposit growth? - Management described the deposit environment as competitive but rational, with expectations for loan growth to exceed deposit growth [30] Question: What are the expectations for fee income growth? - Management expects mid-single-digit growth in fee income, with a shift from fee income to net interest income anticipated due to the steepening yield curve [73] Question: How do you plan to fund the mortgage finance business as it grows? - The mortgage finance business will be funded through a mix of wholesale and core deposits, maintaining a strong funding profile [59] Question: What are the expectations for credit quality moving forward? - Management expects credit quality to remain strong in the short term, with loan growth and economic outlook being the primary drivers for provision levels [56]