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BOK Financial (BOKF) Up 2.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for BOK Financial (BOKF - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BOK Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
BOK Financial Q2 Earnings & Revenues Beat Estimates
BOK Financial’s 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 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.
2018 Outlook
Management expects net interest revenue to grow at a low double-digit growth rate for full-year 2018. Expenses are estimated to flare up at a low single-digit rate, whereas federal effective tax rate is estimated to be 22-23% for full-year 2018.
Furthermore, around 70% of the $61 million of pre-tax costs associated with the CoBiz deal are expected to be realized in second-half 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, BOK Financial has a poor Growth Score of F, however its momentum is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable soley for momentum based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, BOK Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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BOK Financial (BOKF) Up 2.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for BOK Financial (BOKF - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BOK Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
BOK Financial Q2 Earnings & Revenues Beat Estimates
BOK Financial’s 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 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.
2018 Outlook
Management expects net interest revenue to grow at a low double-digit growth rate for full-year 2018. Expenses are estimated to flare up at a low single-digit rate, whereas federal effective tax rate is estimated to be 22-23% for full-year 2018.
Furthermore, around 70% of the $61 million of pre-tax costs associated with the CoBiz deal are expected to be realized in second-half 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, BOK Financial has a poor Growth Score of F, however its momentum is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable soley for momentum based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, BOK Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.