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BOK Financial (BOKF) Q2 Earnings & Revenues Beat Estimates
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BOK Financial’s (BOKF - Free Report) second-quarter 2018 results recorded a positive earnings surprise of 2.3%. Earnings per share of $1.75 outpaced the Zacks Consensus Estimate of $1.71. Further, the bottom line compared favorably with $1.35 in the prior-year quarter.
The company recorded top-line strength in the quarter, aided by rising rates and higher loan balances. Moreover, improved credit trends with no provisions and steady capital position were the positives. However, expenses escalated in the reported quarter.
Net income attributable to common shareholders came in at $114.4 million compared with $88.1 million reported in the year-ago quarter.
Revenues Increase and Costs Dip, Loan Improves
Revenues came in at $395 million, up 4.7% year over year. Additionally, the revenue figure surpassed the Zacks Consensus Estimate of $394.5 million.
Net interest revenues came in at $238.6 million, up 16.3% year over year. Net interest margin (NIM) also expanded 28 basis points year over year to 3.17%.
BOK Financial’s fees and commissions revenues amounted to $157.9 million, down 5.6% on a year-over-year basis. Lower brokerage and trading revenues, along with reduced mortgage banking revenues, mainly resulted in this fall.
Total other operating expenses were $246.5 million, up 2.4% year over year. The upsurge mainly stemmed from higher professional fees, net occupancy and equipment costs, insurance, along with elevated net losses and operating expenses of repossessed assets and high mortgage banking costs. These were partly offset by lower personnel costs.
Efficiency ratio improved to 61.68% from 63.66% in the year-ago period. Generally, a lower ratio indicates improved profitability.
Total loans as of Jun 30, 2018, were $18 billion, up 4.7% from the prior-year quarter. As of the same date, total deposits amounted to $22.2 billion, marginally down from the year-earlier quarter.
Credit Quality Improves
During the second quarter, no provisions for credit losses were witnessed. Further, the combined allowance for credit losses was 1.21% of outstanding loans as of Jun 30, 2018, down from 1.49% in the year-ago period.
Additionally, non-performing assets totaled $268.9 million or 1.49% of outstanding loans and repossessed assets as of Jun 30, 2018, down from $365.5 million or 2.12% in the prior-year period.
Capital Position
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. The company was subject to new regulatory rules on Jan 1, 2015. As of Jun 30, 2018, the common equity Tier 1 capital ratio was 11.92% as compared with 11.76% as of Jun 30, 2017.
Tier 1 and total capital ratios on Jun 30, 2018, were 11.92% and 13.26%, respectively, compared with 11.76% and 13.36% as of Jun 30, 2017. Leverage ratio was 9.57% compared with 9.27% as of Jun 30, 2017.
Share Repurchase Update
During the April-June quarter, the company repurchased 8.3 million common shares at an average price of $99.84 per share.
Concurrent with the earnings release, the company’s board of directors announced the common stock dividend of 50 cents per share, up 11.1% from the prior payout. The increased dividend will be paid on or about Aug 27, to shareholders of record as on Aug 13.
Our Viewpoint
BOK Financial’s consistent revenue growth keeps us optimistic about the stock. Furthermore, continued growth in loan balances indicates an efficient organic growth strategy. The company’s diverse revenue mix and favorable geographic footprint are likely to keep supporting growth in the upcoming quarters. Also, absence of provision is a tailwind. Nevertheless, escalating expenses remains a concern.
BOK Financial Corporation Price, Consensus and EPS Surprise
Driven by top-line strength, Synovus Financial’s (SNV - Free Report) second-quarter 2018 results reported a positive earnings surprise of 4.5%. Adjusted earnings of 92 cents per share beat the Zacks Consensus Estimate of 88 cents. Also, the reported figure came in 52.6% higher than the prior-year quarter tally. Higher revenues backed by strong loans & deposits balances drove organic growth. Notably, lower efficiency ratio and improved credit quality were tailwinds. Moreover, positive impact of rising rates was witnessed.
People's United Financial Inc. reported net earnings of 32 cents per share in second-quarter 2018, in line with the Zacks Consensus Estimate. Moreover, the reported figure climbed 33.3% year over year. Results benefited from an improvement in net interest income, and decline in expenses and provisions. Loan balances improved during the quarter.
Riding on higher revenues, Citizens Financial Group (CFG - Free Report) delivered a positive earnings surprise of 2.3% in the April-June quarter. Earnings per share of 88 cents topped the Zacks Consensus Estimate of 66 cents. The company experienced continued expansion of margins and loan growth, which aided revenues. Also, higher deposits and lower expenses were some other positives. However, increase in provisions was the main undermining factor.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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BOK Financial (BOKF) Q2 Earnings & Revenues Beat Estimates
BOK Financial’s (BOKF - Free Report) second-quarter 2018 results recorded a positive earnings surprise of 2.3%. Earnings per share of $1.75 outpaced the Zacks Consensus Estimate of $1.71. Further, the bottom line compared favorably with $1.35 in the prior-year quarter.
The company recorded top-line strength in the quarter, aided by rising rates and higher loan balances. Moreover, improved credit trends with no provisions and steady capital position were the positives. However, expenses escalated in the reported quarter.
Net income attributable to common shareholders came in at $114.4 million compared with $88.1 million reported in the year-ago quarter.
Revenues Increase and Costs Dip, Loan Improves
Revenues came in at $395 million, up 4.7% year over year. Additionally, the revenue figure surpassed the Zacks Consensus Estimate of $394.5 million.
Net interest revenues came in at $238.6 million, up 16.3% year over year. Net interest margin (NIM) also expanded 28 basis points year over year to 3.17%.
BOK Financial’s fees and commissions revenues amounted to $157.9 million, down 5.6% on a year-over-year basis. Lower brokerage and trading revenues, along with reduced mortgage banking revenues, mainly resulted in this fall.
Total other operating expenses were $246.5 million, up 2.4% year over year. The upsurge mainly stemmed from higher professional fees, net occupancy and equipment costs, insurance, along with elevated net losses and operating expenses of repossessed assets and high mortgage banking costs. These were partly offset by lower personnel costs.
Efficiency ratio improved to 61.68% from 63.66% in the year-ago period. Generally, a lower ratio indicates improved profitability.
Total loans as of Jun 30, 2018, were $18 billion, up 4.7% from the prior-year quarter. As of the same date, total deposits amounted to $22.2 billion, marginally down from the year-earlier quarter.
Credit Quality Improves
During the second quarter, no provisions for credit losses were witnessed. Further, the combined allowance for credit losses was 1.21% of outstanding loans as of Jun 30, 2018, down from 1.49% in the year-ago period.
Additionally, non-performing assets totaled $268.9 million or 1.49% of outstanding loans and repossessed assets as of Jun 30, 2018, down from $365.5 million or 2.12% in the prior-year period.
Capital Position
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. The company was subject to new regulatory rules on Jan 1, 2015. As of Jun 30, 2018, the common equity Tier 1 capital ratio was 11.92% as compared with 11.76% as of Jun 30, 2017.
Tier 1 and total capital ratios on Jun 30, 2018, were 11.92% and 13.26%, respectively, compared with 11.76% and 13.36% as of Jun 30, 2017. Leverage ratio was 9.57% compared with 9.27% as of Jun 30, 2017.
Share Repurchase Update
During the April-June quarter, the company repurchased 8.3 million common shares at an average price of $99.84 per share.
Concurrent with the earnings release, the company’s board of directors announced the common stock dividend of 50 cents per share, up 11.1% from the prior payout. The increased dividend will be paid on or about Aug 27, to shareholders of record as on Aug 13.
Our Viewpoint
BOK Financial’s consistent revenue growth keeps us optimistic about the stock. Furthermore, continued growth in loan balances indicates an efficient organic growth strategy. The company’s diverse revenue mix and favorable geographic footprint are likely to keep supporting growth in the upcoming quarters. Also, absence of provision is a tailwind. Nevertheless, escalating expenses remains a concern.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation Price, Consensus and EPS Surprise | BOK Financial Corporation Quote
BOK Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Competitive Landscape
Driven by top-line strength, Synovus Financial’s (SNV - Free Report) second-quarter 2018 results reported a positive earnings surprise of 4.5%. Adjusted earnings of 92 cents per share beat the Zacks Consensus Estimate of 88 cents. Also, the reported figure came in 52.6% higher than the prior-year quarter tally. Higher revenues backed by strong loans & deposits balances drove organic growth. Notably, lower efficiency ratio and improved credit quality were tailwinds. Moreover, positive impact of rising rates was witnessed.
People's United Financial Inc. reported net earnings of 32 cents per share in second-quarter 2018, in line with the Zacks Consensus Estimate. Moreover, the reported figure climbed 33.3% year over year. Results benefited from an improvement in net interest income, and decline in expenses and provisions. Loan balances improved during the quarter.
Riding on higher revenues, Citizens Financial Group (CFG - Free Report) delivered a positive earnings surprise of 2.3% in the April-June quarter. Earnings per share of 88 cents topped the Zacks Consensus Estimate of 66 cents. The company experienced continued expansion of margins and loan growth, which aided revenues. Also, higher deposits and lower expenses were some other positives. However, increase in provisions was the main undermining factor.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>