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BOK Financial (BOKF) Beats Q1 Earnings and Revenue Estimates
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Driven by higher revenues, BOK Financial Corporation (BOKF - Free Report) reported a positive earnings surprise of 29.8% in first-quarter 2017. Earnings per share of $1.35 surpassed the Zacks Consensus Estimate of $1.04. Moreover, the bottom line jumped 110.9% from the prior-year quarter.
Better-than-expected results were primarily driven by higher net interest income. Rise in loan balances aided revenue growth. Notably, the absence of provisions in the quarter acted as a tailwind. However, the results were partially offset by an increase in expenses.
Net income attributable to common shareholders came in at $88.4 million, up 107.5% from $42.6 million in the year-ago quarter.
Revenue Growth More than Offsets Higher Expenses
Revenues came in at $365.5 million, up 17.6% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate of $359 million.
Net interest revenue came in at $201.2 million, up 36.3% year over year. Net interest margin (NIM) also expanded 16 basis point year over year to 2.81%.
BOK Financial’s fees and commissions revenues amounted to $164.4 million, up slightly on a year-over-year basis. The quarter witnessed growth in several income categories, partially offset by lower mortgage banking and other revenues.
Total other operating expenses were $244.7 million, up nearly 1% year over year. The increase was caused by almost all components of expenses, except insurance and other costs.
Total loans at BOK Financial as of Mar 31, 2017 were $17.0 billion, almost stable compared with the prior quarter. As of the same date, total deposits amounted to $22.6 billion, down nearly 1% from the prior quarter.
Credit Quality: A Mixed Bag
The company did not record any provisions during the quarter. Also, net recovery was $0.7 million as against charge offs of $22.5 million in the prior-year period.
Further, non-performing assets totaled $333.9 million or 1.96% of outstanding loans and repossessed assets as of Mar 31, 2017, down from of $349.3 million or 2.18% in the prior-year period.
However, the combined allowance for credit losses was 1.52% of outstanding loans as of Mar 31, 2017, up from 1.50% in the year-ago period.
Steady Capital Position
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. The company became subject to new regulatory rules on Jan 1, 2015. As of Mar 31, 2017, the common equity Tier 1 capital ratio was 11.60%.
Tier 1 and total capital ratios were 11.60% and 13.26%, respectively, compared with 12.00% and 13.21% as of Mar 31, 2016. Leverage ratio was 8.89% compared with 9.12% as of Mar 31, 2016.
Our Viewpoint
BOK Financial’s consistent revenue growth keeps us optimistic about the stock. Moreover, continued growth in loan balances indicates an efficient organic growth strategy. Its diverse revenue mix and favorable geographic footprint should support growth in the upcoming quarters.
However, several issues, including the stringent regulatory landscape and rising expenses, remain key concerns.
Regions Financial Corporation’s (RF - Free Report) first-quarter 2017 earnings from continuing operations of 23 cents per share surpassed the Zacks Consensus Estimate by a penny. Also, the figure was 15% higher than the prior-year quarter.
First Horizon National Corporation (FHN - Free Report) reported first-quarter 2017 earnings per share of 23 cents, in line with the Zacks Consensus Estimate. However, the figure represents an increase of 15% over the year-ago quarter.
Bank of the Ozarks, Inc.’s first-quarter 2017 earnings of 73 cents per share surpassed the Zacks Consensus Estimate of 71 cents. The figure improved 28.1% on a year-over-year basis.
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Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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BOK Financial (BOKF) Beats Q1 Earnings and Revenue Estimates
Driven by higher revenues, BOK Financial Corporation (BOKF - Free Report) reported a positive earnings surprise of 29.8% in first-quarter 2017. Earnings per share of $1.35 surpassed the Zacks Consensus Estimate of $1.04. Moreover, the bottom line jumped 110.9% from the prior-year quarter.
Better-than-expected results were primarily driven by higher net interest income. Rise in loan balances aided revenue growth. Notably, the absence of provisions in the quarter acted as a tailwind. However, the results were partially offset by an increase in expenses.
Net income attributable to common shareholders came in at $88.4 million, up 107.5% from $42.6 million in the year-ago quarter.
Revenue Growth More than Offsets Higher Expenses
Revenues came in at $365.5 million, up 17.6% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate of $359 million.
Net interest revenue came in at $201.2 million, up 36.3% year over year. Net interest margin (NIM) also expanded 16 basis point year over year to 2.81%.
BOK Financial’s fees and commissions revenues amounted to $164.4 million, up slightly on a year-over-year basis. The quarter witnessed growth in several income categories, partially offset by lower mortgage banking and other revenues.
Total other operating expenses were $244.7 million, up nearly 1% year over year. The increase was caused by almost all components of expenses, except insurance and other costs.
Total loans at BOK Financial as of Mar 31, 2017 were $17.0 billion, almost stable compared with the prior quarter. As of the same date, total deposits amounted to $22.6 billion, down nearly 1% from the prior quarter.
Credit Quality: A Mixed Bag
The company did not record any provisions during the quarter. Also, net recovery was $0.7 million as against charge offs of $22.5 million in the prior-year period.
Further, non-performing assets totaled $333.9 million or 1.96% of outstanding loans and repossessed assets as of Mar 31, 2017, down from of $349.3 million or 2.18% in the prior-year period.
However, the combined allowance for credit losses was 1.52% of outstanding loans as of Mar 31, 2017, up from 1.50% in the year-ago period.
Steady Capital Position
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. The company became subject to new regulatory rules on Jan 1, 2015. As of Mar 31, 2017, the common equity Tier 1 capital ratio was 11.60%.
Tier 1 and total capital ratios were 11.60% and 13.26%, respectively, compared with 12.00% and 13.21% as of Mar 31, 2016. Leverage ratio was 8.89% compared with 9.12% as of Mar 31, 2016.
Our Viewpoint
BOK Financial’s consistent revenue growth keeps us optimistic about the stock. Moreover, continued growth in loan balances indicates an efficient organic growth strategy. Its diverse revenue mix and favorable geographic footprint should support growth in the upcoming quarters.
However, several issues, including the stringent regulatory landscape and rising expenses, remain key concerns.
BOK Financial Corporation Price and EPS Surprise
BOK Financial Corporation Price and EPS Surprise | BOK Financial Corporation Quote
Currently, BOK Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Performance of other Banks
Regions Financial Corporation’s (RF - Free Report) first-quarter 2017 earnings from continuing operations of 23 cents per share surpassed the Zacks Consensus Estimate by a penny. Also, the figure was 15% higher than the prior-year quarter.
First Horizon National Corporation (FHN - Free Report) reported first-quarter 2017 earnings per share of 23 cents, in line with the Zacks Consensus Estimate. However, the figure represents an increase of 15% over the year-ago quarter.
Bank of the Ozarks, Inc.’s first-quarter 2017 earnings of 73 cents per share surpassed the Zacks Consensus Estimate of 71 cents. The figure improved 28.1% on a year-over-year basis.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>