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BOK Financial (BOKF) Gains 2.1% as Q1 Earnings Beat Estimates
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BOK Financial Corporation’s (BOKF - Free Report) first-quarter 2024 adjusted earnings per share (EPS) of $1.91 beat the Zacks Consensus Estimate of $1.72. The bottom line compared unfavorably with earnings of $2.43 per share reported a year ago.
Shares of BOKF have gained 2.1% following the release of its higher-than-expected quarterly performance.
The results benefited from a rise in total fees and commissions, higher loans and deposit balances. Moreover, a decline in provisions was another positive. However, lower net interest revenues and elevated expenses were major undermining factors.
The results excluded the charges related to the FDIC special assessment and the loss from repositioning of the available for sale securities portfolio. After considering it, net income attributable to shareholders was $83.7 million, down 48.4% year over year.
Quarterly Revenues Decline, Expenses Rise
Quarterly net revenues of $455.3 million (net interest revenues and total other operating revenues) were down 14.1% year over year. The top line missed the Zacks Consensus Estimate of $473.7 million.
Net interest revenues were $293.6 million, down 16.7% year over year. Net interest margin deteriorated 84 basis points to 2.61%.
Total fees and commissions were $200.6 million, up 7.8% year over year. The rise was driven by an increase in almost all fee income components except for transaction card revenues and other revenues.
Total other operating expenses were $340.4 million, up 11.3% year over year. The rise was primarily due to an increase in both personnel and non-personnel expenses and $6.5 million of charges related to FDIC special assessment.
The efficiency ratio increased to 67.13% from the prior year’s 56.79%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Mar 31, 2024, total loans were $24.2 billion, up 1.1% from the previous quarter. Total deposits amounted to $35.4 billion, up 4% from the previous quarter’s reported figure.
Credit Quality: Mixed Bag
Non-performing assets were $122.4 million or 0.51% of outstanding loans and repossessed assets as of Mar 31, 2023, which declined from $132.9 million or 0.58% recorded in the prior-year quarter.
Provisions for credit losses were $8 million, which decreased 50% from the prior-year quarter.
The company recorded net charge-offs of $5.5 million, which increased significantly from $0.8 million reported in the prior-year quarter.
Further, the allowance for loan losses was 1.17% of outstanding loans as of Mar 31, 2024, which increased from 1.1% reported in the year-ago quarter.
Capital Ratios & Profitability Ratios Decline
As of Mar 31, 2024, the common equity Tier 1 capital ratio was 11.99%, which declined from 12.19% as of Mar 31, 2023. Tier 1 capital ratio and total capital ratios were 12% and 13.15%, which decreased from 12.20% and 13.21%, respectively, as of Mar 31, 2023.
The leverage ratio was 9.42%, which declined from 9.94% as of Mar 31, 2023.
Return on average equity was 6.53%, down from the year-earlier quarter’s 13.61%. Return on average assets was 0.67%, down from 1.43% reported in the year-ago quarter.
Share Repurchase Update
During the fourth quarter, BOKF repurchased approximately 0.61 million shares at an average price of $83.89 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances. Declining provisions support the company’s financials. However, a decline in net interest revenues and elevated expenses are near-term concerns.
BOK Financial Corporation Price, Consensus and EPS Surprise
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2024 EPS of 62 cents (excluding non-recurring items), which beat the Zacks Consensus Estimate of 59 cents. However, earnings compared unfavorably with 70 cents reported in the year-ago quarter.
TCBI's results benefited from an increase in non-interest income and higher loan and deposit balances. Additionally, strong capital position and lower provisions were other positives. However, a decline in NII and an increase in expenses were the undermining factors.
Citizens Financial Group (CFG - Free Report) reported first-quarter 2024 EPS of 65 cents, missing the Zacks Consensus Estimate of 75 cents. The bottom line declined from $1 reported in the year-ago quarter.
Underlying EPS for the first quarter of 2024 was 79 cents, down from $1.10 reported in the year-ago quarter.
CFG’s results were adversely affected by lower NII and a rise in provisions and operating expenses. However, an increase in non-interest income and lower allowance for credit losses offered some support.
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BOK Financial (BOKF) Gains 2.1% as Q1 Earnings Beat Estimates
BOK Financial Corporation’s (BOKF - Free Report) first-quarter 2024 adjusted earnings per share (EPS) of $1.91 beat the Zacks Consensus Estimate of $1.72. The bottom line compared unfavorably with earnings of $2.43 per share reported a year ago.
Shares of BOKF have gained 2.1% following the release of its higher-than-expected quarterly performance.
The results benefited from a rise in total fees and commissions, higher loans and deposit balances. Moreover, a decline in provisions was another positive. However, lower net interest revenues and elevated expenses were major undermining factors.
The results excluded the charges related to the FDIC special assessment and the loss from repositioning of the available for sale securities portfolio. After considering it, net income attributable to shareholders was $83.7 million, down 48.4% year over year.
Quarterly Revenues Decline, Expenses Rise
Quarterly net revenues of $455.3 million (net interest revenues and total other operating revenues) were down 14.1% year over year. The top line missed the Zacks Consensus Estimate of $473.7 million.
Net interest revenues were $293.6 million, down 16.7% year over year. Net interest margin deteriorated 84 basis points to 2.61%.
Total fees and commissions were $200.6 million, up 7.8% year over year. The rise was driven by an increase in almost all fee income components except for transaction card revenues and other revenues.
Total other operating expenses were $340.4 million, up 11.3% year over year. The rise was primarily due to an increase in both personnel and non-personnel expenses and $6.5 million of charges related to FDIC special assessment.
The efficiency ratio increased to 67.13% from the prior year’s 56.79%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Mar 31, 2024, total loans were $24.2 billion, up 1.1% from the previous quarter. Total deposits amounted to $35.4 billion, up 4% from the previous quarter’s reported figure.
Credit Quality: Mixed Bag
Non-performing assets were $122.4 million or 0.51% of outstanding loans and repossessed assets as of Mar 31, 2023, which declined from $132.9 million or 0.58% recorded in the prior-year quarter.
Provisions for credit losses were $8 million, which decreased 50% from the prior-year quarter.
The company recorded net charge-offs of $5.5 million, which increased significantly from $0.8 million reported in the prior-year quarter.
Further, the allowance for loan losses was 1.17% of outstanding loans as of Mar 31, 2024, which increased from 1.1% reported in the year-ago quarter.
Capital Ratios & Profitability Ratios Decline
As of Mar 31, 2024, the common equity Tier 1 capital ratio was 11.99%, which declined from 12.19% as of Mar 31, 2023. Tier 1 capital ratio and total capital ratios were 12% and 13.15%, which decreased from 12.20% and 13.21%, respectively, as of Mar 31, 2023.
The leverage ratio was 9.42%, which declined from 9.94% as of Mar 31, 2023.
Return on average equity was 6.53%, down from the year-earlier quarter’s 13.61%. Return on average assets was 0.67%, down from 1.43% reported in the year-ago quarter.
Share Repurchase Update
During the fourth quarter, BOKF repurchased approximately 0.61 million shares at an average price of $83.89 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances. Declining provisions support the company’s financials. However, a decline in net interest revenues and elevated expenses are near-term concerns.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation price-consensus-eps-surprise-chart | BOK Financial Corporation Quote
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2024 EPS of 62 cents (excluding non-recurring items), which beat the Zacks Consensus Estimate of 59 cents. However, earnings compared unfavorably with 70 cents reported in the year-ago quarter.
TCBI's results benefited from an increase in non-interest income and higher loan and deposit balances. Additionally, strong capital position and lower provisions were other positives. However, a decline in NII and an increase in expenses were the undermining factors.
Citizens Financial Group (CFG - Free Report) reported first-quarter 2024 EPS of 65 cents, missing the Zacks Consensus Estimate of 75 cents. The bottom line declined from $1 reported in the year-ago quarter.
Underlying EPS for the first quarter of 2024 was 79 cents, down from $1.10 reported in the year-ago quarter.
CFG’s results were adversely affected by lower NII and a rise in provisions and operating expenses. However, an increase in non-interest income and lower allowance for credit losses offered some support.