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Why Is BOK Financial (BOKF) Up 4.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for BOK Financial (BOKF - Free Report) . Shares have added about 4.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
BOK Financial Q1 Earnings Beat, Revenues Improve Y/Y
BOK Financial’s earnings per share of $2.10 handily surpassed the Zacks Consensus Estimate of $1.92. Further, the bottom line compares favorably with the prior-year quarter’s 88 cents.
Results benefited from marginal growth in revenues and provision benefits, partly offset by higher expenses and lower loan balance. Further, rise in deposit balance and improving capital ratios were tailwinds.
Net income attributable to shareholders came in at $146.1 million compared with the $62.1 million recorded in the year-ago quarter.
Revenues Climb, Costs Up, Loans Decrease
Net revenues in the first quarter came in at $444.3 million, up marginally year on year. The top line, however, missed the Zacks Consensus Estimate of $472.3 million.
Net interest revenues totaled $280.4 million, up 7.3% year over year. However, net interest margin (NIM) shrunk 18 basis points year on year to 2.62%.
Total fees and commissions amounted to $162.2 million, down15.9% on a year-over-year basis. Almost all the components declined except for transaction card revenues and other revenues.
Total other operating expenses were $282.6 million, flaring up 5.2% year on year. This uptick mainly stemmed from rise in mortgage banking costs, data processing and communications, net occupancy and equipment, personnel expenses and charitable contributions to BOKF Foundation.
Efficiency ratio rose to 63.32% from the prior year’s 58.62%. Generally, a higher ratio indicates deterioration in profitability.
Total loans as of Mar 31, 2021, were $22.5 billion, down 2.1% sequentially. As of the same date, total deposits amounted to $37.9 billion, up 4.7% sequentially.
Credit Quality: A Mixed Bag
Provisions for credit losses were a benefit of $25 million against the provision of $93.8 million recorded in the prior-year quarter. Net charge-offs were $14.5 million, down 16% year over year.
However non-performing assets totaled $441.5 million or 1.95% of outstanding loans and repossessed assets as of Mar 31, 2021, up from the $291.7 million or 1.30% recorded in the prior-year period. Further, allowance for loan losses were 1.56% of outstanding loans as of Mar 31, 2021, up from the year-ago period’s 1.40%.
Capital & Profitability Ratios Improve
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. As of Mar 31, 2021, the common equity Tier 1 capital ratio was 12.14%, up from 10.98% as of Mar 31, 2020.
Tier 1 and total capital ratios on Mar 31, 2021, were 12.21% and 13.98%, respectively, compared with 10.98% and 12.65% as of Mar 31, 2020. Leverage ratio was 8.51%, up from 8.15% as of Mar 31, 2020.
Return on average equity was 11.28% compared with the year-earlier quarter’s 5.10%. Return on average assets was 1.18%, inching up from the 0.55% recorded in the year-ago quarter.
Share Repurchase Update
During the first quarter, the company repurchased 260,000 shares of common stock at an average price of $77.20 per share.
Outlook
Management estimates loan growth to remain soft in the short term but accelerate in second-half 2021. Loans are expected to grow in the low single-digit range for 2021, excluding the impact of any PPP activity.
Available-for-sale security portfolio yield might decrease as prepayments force reinvestment at lower rates.
Interest-bearing deposit costs will remain near a bottom.
The combination of securities reinvestment at lower rates and minimal room to further lower deposit costs will strain net interest margin.
Fee revenue categories are expected to grow modestly, with the exception of brokerage and trading and mortgage. Growth in other operating revenue is anticipated to come by offering new products and services and by further development of the company’s presence in other markets.
Operating expenses budgeted to grow at a low single-digit pace.
Additional loan loss reserve release is projected with an improving economic outlook and further oil price stability.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, BOK Financial has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
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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Why Is BOK Financial (BOKF) Up 4.8% Since Last Earnings Report?
It has been about a month since the last earnings report for BOK Financial (BOKF - Free Report) . Shares have added about 4.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
BOK Financial Q1 Earnings Beat, Revenues Improve Y/Y
BOK Financial’s earnings per share of $2.10 handily surpassed the Zacks Consensus Estimate of $1.92. Further, the bottom line compares favorably with the prior-year quarter’s 88 cents.
Results benefited from marginal growth in revenues and provision benefits, partly offset by higher expenses and lower loan balance. Further, rise in deposit balance and improving capital ratios were tailwinds.
Net income attributable to shareholders came in at $146.1 million compared with the $62.1 million recorded in the year-ago quarter.
Revenues Climb, Costs Up, Loans Decrease
Net revenues in the first quarter came in at $444.3 million, up marginally year on year. The top line, however, missed the Zacks Consensus Estimate of $472.3 million.
Net interest revenues totaled $280.4 million, up 7.3% year over year. However, net interest margin (NIM) shrunk 18 basis points year on year to 2.62%.
Total fees and commissions amounted to $162.2 million, down15.9% on a year-over-year basis. Almost all the components declined except for transaction card revenues and other revenues.
Total other operating expenses were $282.6 million, flaring up 5.2% year on year. This uptick mainly stemmed from rise in mortgage banking costs, data processing and communications, net occupancy and equipment, personnel expenses and charitable contributions to BOKF Foundation.
Efficiency ratio rose to 63.32% from the prior year’s 58.62%. Generally, a higher ratio indicates deterioration in profitability.
Total loans as of Mar 31, 2021, were $22.5 billion, down 2.1% sequentially. As of the same date, total deposits amounted to $37.9 billion, up 4.7% sequentially.
Credit Quality: A Mixed Bag
Provisions for credit losses were a benefit of $25 million against the provision of $93.8 million recorded in the prior-year quarter. Net charge-offs were $14.5 million, down 16% year over year.
However non-performing assets totaled $441.5 million or 1.95% of outstanding loans and repossessed assets as of Mar 31, 2021, up from the $291.7 million or 1.30% recorded in the prior-year period. Further, allowance for loan losses were 1.56% of outstanding loans as of Mar 31, 2021, up from the year-ago period’s 1.40%.
Capital & Profitability Ratios Improve
Armed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. As of Mar 31, 2021, the common equity Tier 1 capital ratio was 12.14%, up from 10.98% as of Mar 31, 2020.
Tier 1 and total capital ratios on Mar 31, 2021, were 12.21% and 13.98%, respectively, compared with 10.98% and 12.65% as of Mar 31, 2020. Leverage ratio was 8.51%, up from 8.15% as of Mar 31, 2020.
Return on average equity was 11.28% compared with the year-earlier quarter’s 5.10%. Return on average assets was 1.18%, inching up from the 0.55% recorded in the year-ago quarter.
Share Repurchase Update
During the first quarter, the company repurchased 260,000 shares of common stock at an average price of $77.20 per share.
Outlook
Management estimates loan growth to remain soft in the short term but accelerate in second-half 2021. Loans are expected to grow in the low single-digit range for 2021, excluding the impact of any PPP activity.
Available-for-sale security portfolio yield might decrease as prepayments force reinvestment at lower rates.
Interest-bearing deposit costs will remain near a bottom.
The combination of securities reinvestment at lower rates and minimal room to further lower deposit costs will strain net interest margin.
Fee revenue categories are expected to grow modestly, with the exception of brokerage and trading and mortgage. Growth in other operating revenue is anticipated to come by offering new products and services and by further development of the company’s presence in other markets.
Operating expenses budgeted to grow at a low single-digit pace.
Additional loan loss reserve release is projected with an improving economic outlook and further oil price stability.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, BOK Financial has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
BOK Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.