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BOK Financial (BOKF) Tops on Q3 Earnings & Revenues, Rises 5%
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Shares of BOK Financial (BOKF - Free Report) rallied 5% in response to better-than-expected third-quarter 2021 results. Earnings per share of $2.74 handily surpassed the Zacks Consensus Estimate of $1.82. The bottom line increased 25% from the prior-year quarter.
Results benefited from lower expenses, a rise in the net interest income and provision benefits. However, lower fees and commissions, and a decline in the loan balance were the undermining factors.
Net income attributable to shareholders was $188.3 million, up 22.3% year over year.
Revenues Rise, Costs & Loans Balance Decline
Net revenues (including net interest revenues and other operating revenues) of $510.1 million improved 1.8% year over year. The top line beat the Zacks Consensus Estimate of $451.4 million.
Net interest revenues were $280.2 million, up 3.1% year over year. Net interest margin shrunk 15 basis points (bps) to 2.66%.
Total fees and commissions amounted to $190.4 million, down 14.6%. The fall was largely due to lower brokerage and trading revenues, and mortgage banking revenues.
Total other operating expenses were $291.3 million, down 1.9%. The fall was mainly due to lower personnel costs, professional fees and services and mortgage banking costs.
The efficiency ratio rose to 61.23% from the prior year’s 59.57%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Sep 30, 2021, total loans were $20.3 billion, down 5% sequentially. As of the same date, total deposits amounted to $38.5 billion, up 2.9%.
Credit Quality Improve
Provision for expected credit losses was a benefit of $23 million. Non-performing assets were $349 million or 1.71% of outstanding loans and repossessed assets as of Sep 30, 2021, down from $416.7 million or 1.75% recorded in the prior-year period. Net charge-offs were $7.8 million, down year over year from $22.4 million.
However, the allowance for loan losses was 1.36% of outstanding loans as of Sep 30, 2021, up 40 bps year over year.
Capital & Profitability Ratios Improve
As of Sep 30, 2021, the common equity Tier 1 capital ratio was 12.26%, up from 12.07% as of Sep 30, 2020.
Tier 1 and total capital ratios on Sep 30, 2021, were 12.26% and 13.38%, respectively, compared with 12.07% and 14.05% as of Sep 30, 2020. The leverage ratio was 8.77%, up from 8.39% as of Sep 30, 2020.
Return on average equity was 13.78% compared with the year-earlier quarter’s 11.89%. Return on average assets was 1.51%, up from the 1.25% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 478,141 shares at an average price of $85 per share.
Our View
BOK Financial’s diverse revenue mix and favorable geographic footprint are likely to keep aiding its financials. Solid deposits balance reflects an efficient organic-growth strategy. However, falling loan balance and margin pressure due to lower rates are concerning.
BOK Financial Corporation Price, Consensus and EPS Surprise
Synovus Financial (SNV - Free Report) reported third-quarter 2021 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate of $1.07 per share, aided by solid revenues. The bottom line compared favorably with earnings of 89 cents per share recorded in the year-ago quarter.
Northern Trust Corporation (NTRS - Free Report) has reported third-quarter 2021 earnings per share of $1.80, which surpassed the Zacks Consensus Estimate of $1.67 on the release of credit reserves. The bottom line increased year over year from $1.32.
M&T Bank Corporation (MTB - Free Report) reported an earnings surprise of 6.82% in third-quarter 2021. Net operating earnings per share of $3.76 surpassed the Zacks Consensus Estimate of $3.52. The bottom line also compares favorably with $3.45 per share reported in the year-ago period.
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BOK Financial (BOKF) Tops on Q3 Earnings & Revenues, Rises 5%
Shares of BOK Financial (BOKF - Free Report) rallied 5% in response to better-than-expected third-quarter 2021 results. Earnings per share of $2.74 handily surpassed the Zacks Consensus Estimate of $1.82. The bottom line increased 25% from the prior-year quarter.
Results benefited from lower expenses, a rise in the net interest income and provision benefits. However, lower fees and commissions, and a decline in the loan balance were the undermining factors.
Net income attributable to shareholders was $188.3 million, up 22.3% year over year.
Revenues Rise, Costs & Loans Balance Decline
Net revenues (including net interest revenues and other operating revenues) of $510.1 million improved 1.8% year over year. The top line beat the Zacks Consensus Estimate of $451.4 million.
Net interest revenues were $280.2 million, up 3.1% year over year. Net interest margin shrunk 15 basis points (bps) to 2.66%.
Total fees and commissions amounted to $190.4 million, down 14.6%. The fall was largely due to lower brokerage and trading revenues, and mortgage banking revenues.
Total other operating expenses were $291.3 million, down 1.9%. The fall was mainly due to lower personnel costs, professional fees and services and mortgage banking costs.
The efficiency ratio rose to 61.23% from the prior year’s 59.57%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Sep 30, 2021, total loans were $20.3 billion, down 5% sequentially. As of the same date, total deposits amounted to $38.5 billion, up 2.9%.
Credit Quality Improve
Provision for expected credit losses was a benefit of $23 million. Non-performing assets were $349 million or 1.71% of outstanding loans and repossessed assets as of Sep 30, 2021, down from $416.7 million or 1.75% recorded in the prior-year period. Net charge-offs were $7.8 million, down year over year from $22.4 million.
However, the allowance for loan losses was 1.36% of outstanding loans as of Sep 30, 2021, up 40 bps year over year.
Capital & Profitability Ratios Improve
As of Sep 30, 2021, the common equity Tier 1 capital ratio was 12.26%, up from 12.07% as of Sep 30, 2020.
Tier 1 and total capital ratios on Sep 30, 2021, were 12.26% and 13.38%, respectively, compared with 12.07% and 14.05% as of Sep 30, 2020. The leverage ratio was 8.77%, up from 8.39% as of Sep 30, 2020.
Return on average equity was 13.78% compared with the year-earlier quarter’s 11.89%. Return on average assets was 1.51%, up from the 1.25% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 478,141 shares at an average price of $85 per share.
Our View
BOK Financial’s diverse revenue mix and favorable geographic footprint are likely to keep aiding its financials. Solid deposits balance reflects an efficient organic-growth strategy. However, falling loan balance and margin pressure due to lower rates are concerning.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation price-consensus-eps-surprise-chart | BOK Financial Corporation Quote
BOK Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Synovus Financial (SNV - Free Report) reported third-quarter 2021 adjusted earnings of $1.20 per share, which beat the Zacks Consensus Estimate of $1.07 per share, aided by solid revenues. The bottom line compared favorably with earnings of 89 cents per share recorded in the year-ago quarter.
Northern Trust Corporation (NTRS - Free Report) has reported third-quarter 2021 earnings per share of $1.80, which surpassed the Zacks Consensus Estimate of $1.67 on the release of credit reserves. The bottom line increased year over year from $1.32.
M&T Bank Corporation (MTB - Free Report) reported an earnings surprise of 6.82% in third-quarter 2021. Net operating earnings per share of $3.76 surpassed the Zacks Consensus Estimate of $3.52. The bottom line also compares favorably with $3.45 per share reported in the year-ago period.