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BOK Financial (BOKF) Q1 Earnings & Revenues Miss, Loans Rise
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BOK Financial (BOKF - Free Report) first-quarter 2022 earnings per share of 91 cents missed the Zacks Consensus Estimate of $1.35. The bottom line plunged 56.7% from the prior-year quarter.
Results were undermined by lower net interest revenues, fees and commissions, and a decline in deposits balance. However, lower expenses and improved credit quality were tailwinds.
Net income attributable to shareholders was $62.5 million, down 56.7% year over year.
Revenues, Costs & Deposits Balance Decline
Net revenues of $356.3 million (including net interest revenues and total other operating revenues) in the quarter were down 22.1% year over year. The top line lagged the Zacks Consensus Estimate of $359.8 million.
Net interest revenues were $268.4 million in the quarter, down 4.3% year over year. Net interest margin shrunk 18 basis points (bps) to 2.44%.
Total fees and commissions amounted to $97.6 million, down 39.8%. The fall was largely due to lower brokerage and trading revenues, mortgage banking revenues, and other revenues.
Total other operating expenses were $277.6 million, down 6.2%. The fall was mainly due to lower personnel costs, professional fees and services, and mortgage banking costs.
The efficiency ratio rose to 75.07% from the prior year’s 66.26%. A rise in efficiency ratio indicates deterioration in profitability.
As of Mar 31, 2022, total loans were $20.7 billion, up 2.5% sequentially. However, as of the same date, total deposits, amounting to $39.4 billion, were down 4.4% from the prior quarter.
Credit Quality Improves
Non-performing assets were $352.9 million or 1.70% of outstanding loans and repossessed assets as of Mar 31, 2022, down from $441.5 million or 1.95% recorded in the prior-year period. Net charge-offs were $6 million, down from $14.5 million reported in the prior-year quarter. Allowance for loan losses was 1.19% of outstanding loans as of Mar 31, 2022, down 37 bps year over year.
The company did not create any provision for expected credit losses in the first quarter. It had recorded a benefit of $25 million in the prior-year quarter.
Capital Ratios & Profitability Ratios Deteriorate
As of Mar 31, 2022, the common equity Tier 1 capital ratio was 11.30%, down from 12.14% as of Mar 31, 2021. Tier 1 and total capital ratios on Mar 31, 2022, were 11.31% and 11.25%, respectively, down from 12.21% and 13.98% as of Mar 31, 2021.
Nonetheless, the leverage ratio was 8.47%, up from 8.42% as of Mar 31, 2021.
Return on average equity was 4.93% compared with the year-earlier quarter’s 11.28%. Return on average assets was 0.50%, down from 1.18% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 457,877 shares at an average price of $101.02 per share.
Our View
BOK Financial’s declines in revenues and deposits are near-term headwinds. Deteriorating capital and profitability ratios are other negatives. Nonetheless, its strong liquidity position and investment-grade credit ratings might enable the company to navigate any economic uncertainty.
BOK Financial Corporation Price, Consensus and EPS Surprise
UMB Financial (UMBF - Free Report) reported first-quarter 2022 net operating income per share of $2.17, which surpassed the Zacks Consensus Estimate of $1.65. The bottom line also compares favorably with the prior-year quarter’s earnings of $1.91.
UMBF’s results were supported by higher revenues driven by an increase in net interest incom ("NII") and fee income. A solid balance sheet position was another positive. Increased expenses and deteriorating credit quality were headwinds. Capital ratios witnessed a decline.
Northern Trust Corporation (NTRS - Free Report) delivered an earnings beat of 6.63% for first-quarter 2022. Earnings per share of $1.77 surpassed the Zacks Consensus Estimate of $1.66. Moreover, the bottom line improved 4% year over year.
Higher revenues, aided by a rise in fee income and NII, were a driving factor for NTRS. Most credit metrics also marked significant improvements. However, a rising expense base and weak capital ratios were headwinds.
UBS Group AG (UBS - Free Report) reported first-quarter 2022 net profit attributable to shareholders of $2.1 billion, up 17.1% from the prior-year quarter’s level.
UBS’ performance was driven by a 10% rise in NII compared with the prior-year quarter. Strong capital position was a tailwind.
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BOK Financial (BOKF) Q1 Earnings & Revenues Miss, Loans Rise
BOK Financial (BOKF - Free Report) first-quarter 2022 earnings per share of 91 cents missed the Zacks Consensus Estimate of $1.35. The bottom line plunged 56.7% from the prior-year quarter.
Results were undermined by lower net interest revenues, fees and commissions, and a decline in deposits balance. However, lower expenses and improved credit quality were tailwinds.
Net income attributable to shareholders was $62.5 million, down 56.7% year over year.
Revenues, Costs & Deposits Balance Decline
Net revenues of $356.3 million (including net interest revenues and total other operating revenues) in the quarter were down 22.1% year over year. The top line lagged the Zacks Consensus Estimate of $359.8 million.
Net interest revenues were $268.4 million in the quarter, down 4.3% year over year. Net interest margin shrunk 18 basis points (bps) to 2.44%.
Total fees and commissions amounted to $97.6 million, down 39.8%. The fall was largely due to lower brokerage and trading revenues, mortgage banking revenues, and other revenues.
Total other operating expenses were $277.6 million, down 6.2%. The fall was mainly due to lower personnel costs, professional fees and services, and mortgage banking costs.
The efficiency ratio rose to 75.07% from the prior year’s 66.26%. A rise in efficiency ratio indicates deterioration in profitability.
As of Mar 31, 2022, total loans were $20.7 billion, up 2.5% sequentially. However, as of the same date, total deposits, amounting to $39.4 billion, were down 4.4% from the prior quarter.
Credit Quality Improves
Non-performing assets were $352.9 million or 1.70% of outstanding loans and repossessed assets as of Mar 31, 2022, down from $441.5 million or 1.95% recorded in the prior-year period. Net charge-offs were $6 million, down from $14.5 million reported in the prior-year quarter. Allowance for loan losses was 1.19% of outstanding loans as of Mar 31, 2022, down 37 bps year over year.
The company did not create any provision for expected credit losses in the first quarter. It had recorded a benefit of $25 million in the prior-year quarter.
Capital Ratios & Profitability Ratios Deteriorate
As of Mar 31, 2022, the common equity Tier 1 capital ratio was 11.30%, down from 12.14% as of Mar 31, 2021. Tier 1 and total capital ratios on Mar 31, 2022, were 11.31% and 11.25%, respectively, down from 12.21% and 13.98% as of Mar 31, 2021.
Nonetheless, the leverage ratio was 8.47%, up from 8.42% as of Mar 31, 2021.
Return on average equity was 4.93% compared with the year-earlier quarter’s 11.28%. Return on average assets was 0.50%, down from 1.18% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 457,877 shares at an average price of $101.02 per share.
Our View
BOK Financial’s declines in revenues and deposits are near-term headwinds. Deteriorating capital and profitability ratios are other negatives. Nonetheless, its strong liquidity position and investment-grade credit ratings might enable the company to navigate any economic uncertainty.
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
UMB Financial (UMBF - Free Report) reported first-quarter 2022 net operating income per share of $2.17, which surpassed the Zacks Consensus Estimate of $1.65. The bottom line also compares favorably with the prior-year quarter’s earnings of $1.91.
UMBF’s results were supported by higher revenues driven by an increase in net interest incom ("NII") and fee income. A solid balance sheet position was another positive. Increased expenses and deteriorating credit quality were headwinds. Capital ratios witnessed a decline.
Northern Trust Corporation (NTRS - Free Report) delivered an earnings beat of 6.63% for first-quarter 2022. Earnings per share of $1.77 surpassed the Zacks Consensus Estimate of $1.66. Moreover, the bottom line improved 4% year over year.
Higher revenues, aided by a rise in fee income and NII, were a driving factor for NTRS. Most credit metrics also marked significant improvements. However, a rising expense base and weak capital ratios were headwinds.
UBS Group AG (UBS - Free Report) reported first-quarter 2022 net profit attributable to shareholders of $2.1 billion, up 17.1% from the prior-year quarter’s level.
UBS’ performance was driven by a 10% rise in NII compared with the prior-year quarter. Strong capital position was a tailwind.