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BOK Financial (BOKF) Q4 Earnings & Revenues Miss, Stock Down 7%
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Shares of BOK Financial (BOKF - Free Report) tanked 7.08% in response to disappointing fourth-quarter 2021 results. Earnings per share of $1.71 missed the Zacks Consensus Estimate of $1.81. The bottom line decreased 22.6% from the prior-year quarter.
Results were undermined by lower fees and commissions, and a decline in loan balance. Nonetheless, lower expenses, higher net interest revenues and provision benefits were tailwinds.
Net income attributable to shareholders was $117.3 million, down 23.9% year over year.
In 2021, earnings of $8.95 per share missed the consensus estimate of $9.08. Net income was $618 million, up significantly from $435 million in 2020.
Revenues, Costs & Loan Balance Decline
Net revenues of $423.4 million (including net interest revenues and total fees and commissions) in the quarter were down 11.5% year over year. The top line lagged the Zacks Consensus Estimate of $453.4 million.
In full-year 2021, net revenues decreased 7.2% to $1.78 billion. The top line missed the consensus estimate of $1.89 billion.
Net interest revenues were $277.1 million in the quarter, down 6.8% year over year. Net interest margin shrunk 20 basis points (bps) to 2.52%.
Total fees and commissions amounted to $146.3 million, down 19.2%. The fall was largely due to lower brokerage and trading revenues, and mortgage banking revenues.
Total other operating expenses were $299.5 million, down 1.1%. The fall was mainly due to lower personnel costs, professional fees, and services and mortgage banking costs.
The efficiency ratio rose to 70.14% from the prior year’s 62.77%. A rise in efficiency ratio indicates deterioration in profitability.
As of Dec 31, 2021, total loans were $20.2 billion, down 0.7% sequentially. As of the same date, total deposits amounted to $41.2 billion, up 7.1%.
Strong Credit Quality
Provision for expected credit losses was a benefit of $17 million compared with $6.5 million in the prior-year quarter. Non-performing assets were $369.3 million or 1.83% of outstanding loans and repossessed assets as of Dec 31, 2021, down from $476.9 million or 2.07% recorded in the prior-year period.
Net recoveries were $0.71 million, against net charge-offs of $16.7 million reported in the prior-year quarter. Allowance for loan losses was 1.27% of outstanding loans as of Dec 31, 2021, down 42 bps year over year.
Capital Position Improves & Profitability Ratios Deteriorate
As of Dec 31, 2021, the common equity Tier 1 capital ratio was 12.23%, up from 11.95% as of Dec 31, 2020.
Tier 1 and total capital ratios on Dec 31, 2021, were 12.24% and 13.28%, respectively, compared with 11.95% and 13.82% as of Dec 31, 2020. The leverage ratio was 8.55%, up from 8.28% as of Dec 31, 2020.
Return on average equity was 8.66% compared with the year-earlier quarter’s 11.75%. Return on average assets was 0.92%, down from the 1.22% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 128,522 shares at an average price of $104.46 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
Zions Bancorporation (ZION - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 24.
Over the past 30 days, th Zacks Consensus Estimate for Zions Bancorporation’s quarterly earnings has remained unchanged at $1.33. This implies a 19.9% decrease from the prior-year quarter.
Prosperity Bancshares (PB - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 26.
Over the past 30 days, the Zacks Consensus Estimate for Prosperity Bancshares’ quarterly earnings has remained unchanged at $1.37. This suggests a 7.4% decrease from the prior-year quarter.
East West Bancorp, Inc. (EWBC - Free Report) is slated to report fourth-quarter and full-year 2021 results on Jan 27.
Over the past 30 days, the Zacks Consensus Estimate for East West Bancorp’s quarterly earnings has remained unchanged at $1.55. This indicates a 34.8% increase from the prior-year quarter.
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BOK Financial (BOKF) Q4 Earnings & Revenues Miss, Stock Down 7%
Shares of BOK Financial (BOKF - Free Report) tanked 7.08% in response to disappointing fourth-quarter 2021 results. Earnings per share of $1.71 missed the Zacks Consensus Estimate of $1.81. The bottom line decreased 22.6% from the prior-year quarter.
Results were undermined by lower fees and commissions, and a decline in loan balance. Nonetheless, lower expenses, higher net interest revenues and provision benefits were tailwinds.
Net income attributable to shareholders was $117.3 million, down 23.9% year over year.
In 2021, earnings of $8.95 per share missed the consensus estimate of $9.08. Net income was $618 million, up significantly from $435 million in 2020.
Revenues, Costs & Loan Balance Decline
Net revenues of $423.4 million (including net interest revenues and total fees and commissions) in the quarter were down 11.5% year over year. The top line lagged the Zacks Consensus Estimate of $453.4 million.
In full-year 2021, net revenues decreased 7.2% to $1.78 billion. The top line missed the consensus estimate of $1.89 billion.
Net interest revenues were $277.1 million in the quarter, down 6.8% year over year. Net interest margin shrunk 20 basis points (bps) to 2.52%.
Total fees and commissions amounted to $146.3 million, down 19.2%. The fall was largely due to lower brokerage and trading revenues, and mortgage banking revenues.
Total other operating expenses were $299.5 million, down 1.1%. The fall was mainly due to lower personnel costs, professional fees, and services and mortgage banking costs.
The efficiency ratio rose to 70.14% from the prior year’s 62.77%. A rise in efficiency ratio indicates deterioration in profitability.
As of Dec 31, 2021, total loans were $20.2 billion, down 0.7% sequentially. As of the same date, total deposits amounted to $41.2 billion, up 7.1%.
Strong Credit Quality
Provision for expected credit losses was a benefit of $17 million compared with $6.5 million in the prior-year quarter. Non-performing assets were $369.3 million or 1.83% of outstanding loans and repossessed assets as of Dec 31, 2021, down from $476.9 million or 2.07% recorded in the prior-year period.
Net recoveries were $0.71 million, against net charge-offs of $16.7 million reported in the prior-year quarter. Allowance for loan losses was 1.27% of outstanding loans as of Dec 31, 2021, down 42 bps year over year.
Capital Position Improves & Profitability Ratios Deteriorate
As of Dec 31, 2021, the common equity Tier 1 capital ratio was 12.23%, up from 11.95% as of Dec 31, 2020.
Tier 1 and total capital ratios on Dec 31, 2021, were 12.24% and 13.28%, respectively, compared with 11.95% and 13.82% as of Dec 31, 2020. The leverage ratio was 8.55%, up from 8.28% as of Dec 31, 2020.
Return on average equity was 8.66% compared with the year-earlier quarter’s 11.75%. Return on average assets was 0.92%, down from the 1.22% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 128,522 shares at an average price of $104.46 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Schedule of Other Banks
Zions Bancorporation (ZION - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 24.
Over the past 30 days, th Zacks Consensus Estimate for Zions Bancorporation’s quarterly earnings has remained unchanged at $1.33. This implies a 19.9% decrease from the prior-year quarter.
Prosperity Bancshares (PB - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 26.
Over the past 30 days, the Zacks Consensus Estimate for Prosperity Bancshares’ quarterly earnings has remained unchanged at $1.37. This suggests a 7.4% decrease from the prior-year quarter.
East West Bancorp, Inc. (EWBC - Free Report) is slated to report fourth-quarter and full-year 2021 results on Jan 27.
Over the past 30 days, the Zacks Consensus Estimate for East West Bancorp’s quarterly earnings has remained unchanged at $1.55. This indicates a 34.8% increase from the prior-year quarter.