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BOK Financial (BOKF) Gains on Q3 Earnings Beat, Revenues Dip
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BOK Financial Corporation’s (BOKF - Free Report) shares gained 1.1% following the release of its third-quarter 2022 results. Earnings per share of $2.32 easily surpassed the Zacks Consensus Estimate of $2.05. However, the bottom line declined 15.3% from the prior-year quarter.
Results were aided by an improvement in net interest revenues, driven by higher rates and loan growth. Also, total fees and commissions witnessed a rise in the quarter under review. However, an increase in expenses hurt the results to some extent.
Net income attributable to shareholders was $156.5 million, down 16.9% year over year.
Revenues Decline, Costs Rise
Net revenues of $506 million (including net interest revenues and total other operating revenues) were down 1% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $459.7 million.
Net interest revenues were $316.3 million, up 12.9% year over year. Net interest margin expanded 58 basis points (bps) year over year to 3.24%.
Total fees and commissions were $192.6 million, up 1.2%. The rise was driven by an increase in almost all fee income components except for mortgage banking revenues and other revenues.
Total other operating expenses were $294.8 million, up 1.2% year over year. The rise was due to an increase in almost all cost components except for personnel costs, and costs related to the amortization of intangible assets.
The efficiency ratio decreased to 57.35% from the prior year’s 61.23%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Sep 30, 2022, total loans were $21.79 billion, up 2.3% sequentially. As of the same date, total deposits amounted to $36.42 billion, down 5.7% from the prior quarter.
Credit Quality: Mixed Bag
Non-performing assets were $336.5 million or 1.54% of outstanding loans and repossessed assets as of Sep 30, 2022, down from $349.3 million or 1.71% recorded in the prior-year period.
The company recorded net charge-offs of $0.5 million in the reported quarter, down 94.1% from the prior-year quarter.
Allowance for loan losses was 1.11% of outstanding loans as of Sep 30, 2022, down 25 bps year over year. However, in the reported quarter, the company recorded provisions of $15 million against a provision benefit of $23 million in the prior-year quarter.
Capital & Profitability Ratios Deteriorate
As of Sep 30, 2022, the common equity Tier 1 capital ratio was 11.80%, down from 12.26% as of Sep 30, 2021. Tier 1 and total capital ratios on Sep 30, 2022, were 11.82% and 12.81%, respectively, down from 12.29% and 13.38% as of Sep 30, 2021.
The leverage ratio was 9.76%, up from 8.77% as of Sep 30, 2021.
Return on average equity was 13.01% compared with the year-earlier quarter’s 13.78%. Return on average assets was 1.38%, down from 1.51% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 548,034 shares at an average price of $91.20 per share.
Our View
BOK Financial remains poised to benefit from higher loan balances and increased rates. With sound liquidity, its capital-deployment initiatives seem sustainable. Improving asset quality is another tailwind. However, elevated expenses (as witnessed in the third quarter) might hurt the bottom line in the near term.
BOK Financial Corporation Price, Consensus and EPS Surprise
SVB Financial Group’s third-quarter 2022 earnings per share of $7.21 surpassed the Zacks Consensus Estimate of $6.79. The bottom line reflects a rise of 15.5% from the prior-year quarter.
SIVB’s results were primarily aided by an improvement in NII, driven by higher rates and loan growth. However, a rise in expenses, lower non-interest income and higher provisions were the undermining factors.
BankUnited, Inc.’s (BKU - Free Report) third-quarter 2022 earnings per share of $1.12 outpaced the Zacks Consensus Estimate of $1.01. The bottom line also grew 19.1% from the prior-year quarter.
Results benefited from higher net interest income, a decent rise in loan balance and increasing rates. However, subdued fee income performance, a rise in expenses and an increase in credit costs acted as headwinds for BKU.
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BOK Financial (BOKF) Gains on Q3 Earnings Beat, Revenues Dip
BOK Financial Corporation’s (BOKF - Free Report) shares gained 1.1% following the release of its third-quarter 2022 results. Earnings per share of $2.32 easily surpassed the Zacks Consensus Estimate of $2.05. However, the bottom line declined 15.3% from the prior-year quarter.
Results were aided by an improvement in net interest revenues, driven by higher rates and loan growth. Also, total fees and commissions witnessed a rise in the quarter under review. However, an increase in expenses hurt the results to some extent.
Net income attributable to shareholders was $156.5 million, down 16.9% year over year.
Revenues Decline, Costs Rise
Net revenues of $506 million (including net interest revenues and total other operating revenues) were down 1% year over year. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $459.7 million.
Net interest revenues were $316.3 million, up 12.9% year over year. Net interest margin expanded 58 basis points (bps) year over year to 3.24%.
Total fees and commissions were $192.6 million, up 1.2%. The rise was driven by an increase in almost all fee income components except for mortgage banking revenues and other revenues.
Total other operating expenses were $294.8 million, up 1.2% year over year. The rise was due to an increase in almost all cost components except for personnel costs, and costs related to the amortization of intangible assets.
The efficiency ratio decreased to 57.35% from the prior year’s 61.23%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Sep 30, 2022, total loans were $21.79 billion, up 2.3% sequentially. As of the same date, total deposits amounted to $36.42 billion, down 5.7% from the prior quarter.
Credit Quality: Mixed Bag
Non-performing assets were $336.5 million or 1.54% of outstanding loans and repossessed assets as of Sep 30, 2022, down from $349.3 million or 1.71% recorded in the prior-year period.
The company recorded net charge-offs of $0.5 million in the reported quarter, down 94.1% from the prior-year quarter.
Allowance for loan losses was 1.11% of outstanding loans as of Sep 30, 2022, down 25 bps year over year. However, in the reported quarter, the company recorded provisions of $15 million against a provision benefit of $23 million in the prior-year quarter.
Capital & Profitability Ratios Deteriorate
As of Sep 30, 2022, the common equity Tier 1 capital ratio was 11.80%, down from 12.26% as of Sep 30, 2021. Tier 1 and total capital ratios on Sep 30, 2022, were 11.82% and 12.81%, respectively, down from 12.29% and 13.38% as of Sep 30, 2021.
The leverage ratio was 9.76%, up from 8.77% as of Sep 30, 2021.
Return on average equity was 13.01% compared with the year-earlier quarter’s 13.78%. Return on average assets was 1.38%, down from 1.51% recorded in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 548,034 shares at an average price of $91.20 per share.
Our View
BOK Financial remains poised to benefit from higher loan balances and increased rates. With sound liquidity, its capital-deployment initiatives seem sustainable. Improving asset quality is another tailwind. However, elevated expenses (as witnessed in the third quarter) might hurt the bottom line in the near term.
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
SVB Financial Group’s third-quarter 2022 earnings per share of $7.21 surpassed the Zacks Consensus Estimate of $6.79. The bottom line reflects a rise of 15.5% from the prior-year quarter.
SIVB’s results were primarily aided by an improvement in NII, driven by higher rates and loan growth. However, a rise in expenses, lower non-interest income and higher provisions were the undermining factors.
BankUnited, Inc.’s (BKU - Free Report) third-quarter 2022 earnings per share of $1.12 outpaced the Zacks Consensus Estimate of $1.01. The bottom line also grew 19.1% from the prior-year quarter.
Results benefited from higher net interest income, a decent rise in loan balance and increasing rates. However, subdued fee income performance, a rise in expenses and an increase in credit costs acted as headwinds for BKU.