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Analyst Blog

On Jul 4, 2014, we issued an updated research report on BOK Financial Corporation (BOKF - Analyst Report). The company has transformed from a mere bank in Oklahoma to a leading financial service provider owing to its expansion strategy through inorganic routes and a local leadership-based business model.

Consistent with its strategy, BOK Financial made two acquisitions in the first half of 2014. In Feb 2014, BOK Financial completed the acquisition of Kansas-based GTRUST Financial Corporation, an independent trust and asset management company. The company’s wealth management platform assumed assets worth $600 million.

In Apr 2014, the company acquired Houston-based MBM Advisors, an independent full service retirement and pension plan investment company for around $27 million. The company assumed assets under management of around $1.3 billion.

Further, BOK Financial is strengthening its balance sheet with rising loan balances. The company’s credit quality has been showing decent improvement as well. Period end loans grew at a Compound Annual Growth Rate (CAGR) of 6.3% in the last 4 years (2010-2013) while the company has been able to improve its credit metrics with a declining trend in allowance for credit losses and charge offs in the recent quarters.
 
Despite these positives, we believe there are certain concerns that may pose threats to the company’s financials in the near term. These include a low interest rate environment, escalating operating expenses and the prevailing stringent regulatory landscape.

Over the past 60 days, the Zacks Consensus Estimate for 2014 remained stable at $4.28 per share, while it fell 0.4% to $4.43 per share for 2015.

BOK Financial currently carries a Zacks Rank #3 (Hold).

CVB Financial Corp. (CVBF - Snapshot Report), First Connecticut Bancorp, Inc. (FBNK - Snapshot Report) and Central Pacific Financial Corp. (CPF - Snapshot Report) are better-ranked stocks in the banking space. All these stocks sport a Zacks Rank #1 (Strong Buy).

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