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BOK Financial Benefits From Loan Growth, High Costs a Drag

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On Jan 5, we issued an updated research report on BOK Financial Corporation (BOKF - Free Report) ). The company exhibits strength in several areas, including loans and deposits, and credit quality. However, it continues to face challenges from increasing expense base.

Shares of the company have gained 11.3% in a year’s time, against the 1.2% decline of the industry it belongs to.

Moreover, the Zacks Consensus Estimate for 2017 earnings has been revised slightly upward over the last 60 days. It currently carries a Zacks Rank #3 (Hold).



BOK Financial’s consistent improvement in loan and deposit balances highlights its organic growth. For full-year 2017, the company expects mid-single digit loan growth. Apart from rising loan balances, the company’s focus on expansion through strategic acquisitions should bolster its growth prospects.

BOK Financial’s nonperforming assets, charge offs and allowance for credit losses have been declining consistently over the past few years. It did not have provisions in the prior few years. Notably, management expects credit provisions of $15-$20 million for 2017.

However, the company faces operational risks from escalating costs. Operating expenses saw a CAGR of 4.9% over the last six years (2011-2016). This trend continued in first nine months of 2017 as well. Such consistent rise in expenses despite its focus on expense management is likely to deter bottom-line growth.

Stocks to Consider

Texas Capital Bancshares (TCBI - Free Report) Zacks Consensus Estimate for earnings for 2017 was revised slightly upward, in the last 60 days. Also, its share price has increased 20.4% in the past 12 months. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rankstocks here.

Cullen/Frost Bankers (CFR - Free Report) currently carries a Zacks Rank #2 (Buy). The stock’s 2017 earnings estimates were revised slightly upward, in the last 60 days. Further, the company’s shares have gained 30.2% in a year’s time.

Prosperity Bancshares (PB - Free Report) Zacks Consensus Estimate for earnings for 2017 has remained stable, over the last 60 days. In the past year, its shares have gained 11.9%. Also, it carries a Zacks Rank of 2.

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