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BOK Financial Corporation’s (BOKF - Free Report) fourth-quarter earnings per share of $2.51 easily surpassed the Zacks Consensus Estimate of $2.29. The bottom line increased 46.8% 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 and provisions hurt the results to some extent.
Net income attributable to shareholders was $168.4 million, up 43.6% year over year.
Earnings per share of $7.68 for 2022 surpassed the Zacks Consensus Estimate of $7.49. However, the bottom line declined 14.2% from the prior-year period. Net income attributable to shareholders was $520.3 million, down 15.8% year over year.
Revenues Improve, Expenses Rise
Quarterly net revenues of $549.7 million (including net interest revenues and total other operating revenues) were up 26.5% year over year. The top line surpassed the Zacks Consensus Estimate of $508 million.
Revenues for 2022 were $1.85 billion, down 1% year over year. The top line surpassed the Zacks Consensus Estimate of $1.82 billion.
Net interest revenues were $352.6 million, up 27.3% year over year. The net interest margin expanded 102 basis points (bps) year over year to 3.54%.
Total fees and commissions were $193.6 million, up 32.3% year over year. The rise was driven by an increase in almost all fee income components, except for mortgage banking revenues, and deposit service charges and fees.
Total other operating expenses were $318.5 million, up 6.3% year over year. The rise was due to an increase in almost all cost components, except for charitable contributions to BOKF Foundation, costs related to the amortization of intangible assets and other expenses.
The efficiency ratio decreased to 57.87% from the prior year’s 70.14%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Dec 31, 2022, total loans were $22.56 billion, up 3.5% sequentially. As of the same date, total deposits amounted to $34.48 billion, down 5.3% from the prior quarter.
Credit Quality: Mixed Bag
Non-performing assets were $299.6 million or 1.33% of outstanding loans and repossessed assets as of Dec 31, 2022, down from $369.3 million or 1.83% recorded in the prior-year period. Allowance for loan losses was 1.04% of outstanding loans as of Dec 31, 2022, down 23 bps year over year.
However, the company recorded net charge-offs of $15.5 million in the reported quarter against net recoveries of $0.7 million in the prior-year quarter. Also, it recorded provisions of $15 million against a provision benefit of $17 million in the prior-year quarter.
Capital Ratios Deteriorate, Profitability Ratios Improve
As of Dec 31, 2022, the common equity Tier 1 capital ratio was 11.69%, down from 12.24% as of Dec 31, 2021. Tier 1 and total capital ratios on Dec 31, 2022, were 11.71% and 12.67%, respectively, down from 12.25% and 13.29% as of Dec 31, 2021.
The leverage ratio was 9.91%, up from 8.55% as of Dec 31, 2021.
Return on average equity was 14.48% compared with the year-earlier quarter’s 8.68%. Return on average assets was 1.48%, up from 0.92% in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 314,406 shares at an average price of $103.14 per share.
Our View
BOK Financial is poised to benefit from higher loan balances and increased rates. With sound liquidity, its capital-deployment initiatives seem sustainable. However, elevated expenses (as witnessed in the fourth quarter) might hurt the bottom line in the near term.
BOK Financial Corporation Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2022 net earnings per share of $1.84 surpassed the Zacks Consensus Estimate of $1.66. The bottom line increased 37.3% from the year-ago quarter. We had projected earnings of $1.57 per share.
ZION’s results were primarily aided by an improvement in NII, which was driven by rising rates and increasing loan demand. However, higher provisions, a rise in non-interest expenses, and lower deposit balances and non-interest income were the headwinds, which hurt results to some extent.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2022 earnings per share of 82 cents missed the Zacks Consensus Estimate of $1.11 by a considerable margin. The bottom line also declined 41.8% from the prior-year quarter. We had projected earnings per share of 96 cents.
BKU’s results were adversely impacted by subdued fee income performance and an increase in credit costs. However, higher net interest income, a decent rise in loan balance, increasing rates and a fall in expenses acted as tailwinds.
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BOK Financial (BOKF) Q4 Earnings Beat, Revenues & Costs Rise Y/Y
BOK Financial Corporation’s (BOKF - Free Report) fourth-quarter earnings per share of $2.51 easily surpassed the Zacks Consensus Estimate of $2.29. The bottom line increased 46.8% 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 and provisions hurt the results to some extent.
Net income attributable to shareholders was $168.4 million, up 43.6% year over year.
Earnings per share of $7.68 for 2022 surpassed the Zacks Consensus Estimate of $7.49. However, the bottom line declined 14.2% from the prior-year period. Net income attributable to shareholders was $520.3 million, down 15.8% year over year.
Revenues Improve, Expenses Rise
Quarterly net revenues of $549.7 million (including net interest revenues and total other operating revenues) were up 26.5% year over year. The top line surpassed the Zacks Consensus Estimate of $508 million.
Revenues for 2022 were $1.85 billion, down 1% year over year. The top line surpassed the Zacks Consensus Estimate of $1.82 billion.
Net interest revenues were $352.6 million, up 27.3% year over year. The net interest margin expanded 102 basis points (bps) year over year to 3.54%.
Total fees and commissions were $193.6 million, up 32.3% year over year. The rise was driven by an increase in almost all fee income components, except for mortgage banking revenues, and deposit service charges and fees.
Total other operating expenses were $318.5 million, up 6.3% year over year. The rise was due to an increase in almost all cost components, except for charitable contributions to BOKF Foundation, costs related to the amortization of intangible assets and other expenses.
The efficiency ratio decreased to 57.87% from the prior year’s 70.14%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Dec 31, 2022, total loans were $22.56 billion, up 3.5% sequentially. As of the same date, total deposits amounted to $34.48 billion, down 5.3% from the prior quarter.
Credit Quality: Mixed Bag
Non-performing assets were $299.6 million or 1.33% of outstanding loans and repossessed assets as of Dec 31, 2022, down from $369.3 million or 1.83% recorded in the prior-year period. Allowance for loan losses was 1.04% of outstanding loans as of Dec 31, 2022, down 23 bps year over year.
However, the company recorded net charge-offs of $15.5 million in the reported quarter against net recoveries of $0.7 million in the prior-year quarter. Also, it recorded provisions of $15 million against a provision benefit of $17 million in the prior-year quarter.
Capital Ratios Deteriorate, Profitability Ratios Improve
As of Dec 31, 2022, the common equity Tier 1 capital ratio was 11.69%, down from 12.24% as of Dec 31, 2021. Tier 1 and total capital ratios on Dec 31, 2022, were 11.71% and 12.67%, respectively, down from 12.25% and 13.29% as of Dec 31, 2021.
The leverage ratio was 9.91%, up from 8.55% as of Dec 31, 2021.
Return on average equity was 14.48% compared with the year-earlier quarter’s 8.68%. Return on average assets was 1.48%, up from 0.92% in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 314,406 shares at an average price of $103.14 per share.
Our View
BOK Financial is poised to benefit from higher loan balances and increased rates. With sound liquidity, its capital-deployment initiatives seem sustainable. However, elevated expenses (as witnessed in the fourth 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
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2022 net earnings per share of $1.84 surpassed the Zacks Consensus Estimate of $1.66. The bottom line increased 37.3% from the year-ago quarter. We had projected earnings of $1.57 per share.
ZION’s results were primarily aided by an improvement in NII, which was driven by rising rates and increasing loan demand. However, higher provisions, a rise in non-interest expenses, and lower deposit balances and non-interest income were the headwinds, which hurt results to some extent.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2022 earnings per share of 82 cents missed the Zacks Consensus Estimate of $1.11 by a considerable margin. The bottom line also declined 41.8% from the prior-year quarter. We had projected earnings per share of 96 cents.
BKU’s results were adversely impacted by subdued fee income performance and an increase in credit costs. However, higher net interest income, a decent rise in loan balance, increasing rates and a fall in expenses acted as tailwinds.