A month has gone by since the last earnings report for BOK Financial (BOKF Quick QuoteBOKF - Free Report) . Shares have added about 0.4% 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 drivers.

BOK Financial Q1 Earnings & Revenues Miss, Loans Rise

BOK Financial’s 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. NIM 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.

2022 Outlook

Management estimates loan growth to continue, with period-end growth in the upper-single-digit range. Deposits are expected to fall in the low to mid-single-digit range. Core net interest income (excluding the impact of PPP loans) is expected to increase 9%, backed by loan growth and assuming an additional 200bps increase in short-term rates in 2022. Core NIM is anticipated to increase throughout 2022 to 3%.

Total fee revenues are expected to face tough comparisons from the historically high levels of 2021. Trading & brokerage, and mortgage revenues are projected to decline substantially. Fee income is anticipated to account for 35% or slightly less of total revenues.

The company aims to curtail operating expense growth flat. The overall loan loss reserve as a percent of loan balances is expected to migrate toward 1.20% by the 2022 end.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -12.75% due to these changes.

VGM Scores

At this time, BOK Financial has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BOK Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

BOK Financial belongs to the Zacks Banks - Southwest industry. Another stock from the same industry, Texas Capital (TCBI Quick QuoteTCBI - Free Report) , has gained 3.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

Texas Capital reported revenues of $203.83 million in the last reported quarter, representing a year-over-year change of -14.8%. EPS of $0.69 for the same period compares with $1.33 a year ago.

For the current quarter, Texas Capital is expected to post earnings of $0.74 per share, indicating a change of -43.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Texas Capital. Also, the stock has a VGM Score of F.