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BOK Financial (BOKF) Q2 Earnings Miss While Revenues Beat
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BOK Financial Corporation’s (BOKF - Free Report) second-quarter earnings per share of $2.27 missed the Zacks Consensus Estimate of $2.28. Nonetheless, the bottom line increased 15.8% 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 were a matter of concern.
Net income attributable to shareholders was $151.3 million, up 13.9% year over year.
Revenues Improve, Expenses Rise
Quarterly net revenues of $531.3 million (including net interest revenues and total other operating revenues) were up 20% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $521.1 million.
Net interest revenues were $322.3 million, up 17.6% year over year. Net interest margin expanded 24 basis points year over year to 3%.
Total fees and commissions were $200.5 million, up 15.6% year over year. The rise was driven by an increase in almost all fee income components, except for transaction card revenue, and deposit service charges and fees.
Total other operating expenses were $318.7 million, up 16.5% year over year. The rise was due to an increase in almost all cost components, except for printing, postage and supplies expenditures,amortization of intangible assets, mortgage banking costs and other expenses.
The efficiency ratio decreased to 58.75% from the prior year’s 60.79%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Jun 30, 2023, total loans were $23.24 billion, up 2.1% sequentially. As of the same date, total deposits amounted to $33.29 billion, up 2.2% from the prior quarter.
Credit Quality – Mixed Bag
Allowance for loan losses was 1.13% of outstanding loans as of Jun 30, 2023, flat year over year. Moreover, the company recorded net charge-offs of $6.7 million against recoveries of $0.8 million in the prior-year quarter.
Further, it recorded provisions for credit losses of $17 million in the reported quarter. In the prior-year quarter, the company did not record any provisions.
Nonetheless, non-performing assets were $136.5 million or 0.59% of outstanding loans and repossessed assets as of Jun 30, 2023, down from $332.8 million or 1.56% recorded in the year-ago period.
Capital Ratios and Profitability Ratios Improve
As of Jun 30, 2023, the common equity Tier 1 capital ratio was 12.13%, up from 11.61% as of Jun 30, 2022. Tier 1 and total capital ratios were 12.13% and 13.24%, up from 11.63% and 12.59%, respectively, as of Jun 30, 2022.
The leverage ratio was 9.75%, up from 9.12% as of Jun 30, 2022.
Return on average equity was 12.28% compared with the year-earlier quarter’s 11.27%. Return on average assets was 1.27%, up from 1.13% in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 266,000 shares at an average price of $84.08 per share.
Our View
BOK Financial is poised to benefit from higher loan balances and high interest rates. However, elevated expenses, as witnessed in the second quarter, might hurt the bottom line in the near term.
BOK Financial Corporation Price, Consensus and EPS Surprise
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported second-quarter 2023 earnings per share of $1.33, up from 59 cents in the prior-year quarter. Also, the bottom line surpassed the Zacks Consensus Estimate of 94 cents.
TCBI’s results were aided by rising revenues and improving capital ratios. However, its performance was affected by increased expenses and deteriorating credit quality.
Huntington Bancshares Incorporated (HBAN - Free Report) reported second-quarter 2023 earnings per share of 35 cents, surpassing the Zacks Consensus Estimate of 34 cents. The metric remained flat from the prior-year figure.
HBAN’s results were benefited from increases in NII and non-interest income. However, a rise in expenses and higher provision for credit losses were headwinds.
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BOK Financial (BOKF) Q2 Earnings Miss While Revenues Beat
BOK Financial Corporation’s (BOKF - Free Report) second-quarter earnings per share of $2.27 missed the Zacks Consensus Estimate of $2.28. Nonetheless, the bottom line increased 15.8% 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 were a matter of concern.
Net income attributable to shareholders was $151.3 million, up 13.9% year over year.
Revenues Improve, Expenses Rise
Quarterly net revenues of $531.3 million (including net interest revenues and total other operating revenues) were up 20% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $521.1 million.
Net interest revenues were $322.3 million, up 17.6% year over year. Net interest margin expanded 24 basis points year over year to 3%.
Total fees and commissions were $200.5 million, up 15.6% year over year. The rise was driven by an increase in almost all fee income components, except for transaction card revenue, and deposit service charges and fees.
Total other operating expenses were $318.7 million, up 16.5% year over year. The rise was due to an increase in almost all cost components, except for printing, postage and supplies expenditures,amortization of intangible assets, mortgage banking costs and other expenses.
The efficiency ratio decreased to 58.75% from the prior year’s 60.79%. A decline in the efficiency ratio indicates an improvement in profitability.
As of Jun 30, 2023, total loans were $23.24 billion, up 2.1% sequentially. As of the same date, total deposits amounted to $33.29 billion, up 2.2% from the prior quarter.
Credit Quality – Mixed Bag
Allowance for loan losses was 1.13% of outstanding loans as of Jun 30, 2023, flat year over year. Moreover, the company recorded net charge-offs of $6.7 million against recoveries of $0.8 million in the prior-year quarter.
Further, it recorded provisions for credit losses of $17 million in the reported quarter. In the prior-year quarter, the company did not record any provisions.
Nonetheless, non-performing assets were $136.5 million or 0.59% of outstanding loans and repossessed assets as of Jun 30, 2023, down from $332.8 million or 1.56% recorded in the year-ago period.
Capital Ratios and Profitability Ratios Improve
As of Jun 30, 2023, the common equity Tier 1 capital ratio was 12.13%, up from 11.61% as of Jun 30, 2022. Tier 1 and total capital ratios were 12.13% and 13.24%, up from 11.63% and 12.59%, respectively, as of Jun 30, 2022.
The leverage ratio was 9.75%, up from 9.12% as of Jun 30, 2022.
Return on average equity was 12.28% compared with the year-earlier quarter’s 11.27%. Return on average assets was 1.27%, up from 1.13% in the year-ago quarter.
Share Repurchase Update
In the reported quarter, the company repurchased 266,000 shares at an average price of $84.08 per share.
Our View
BOK Financial is poised to benefit from higher loan balances and high interest rates. However, elevated expenses, as witnessed in the second 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
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported second-quarter 2023 earnings per share of $1.33, up from 59 cents in the prior-year quarter. Also, the bottom line surpassed the Zacks Consensus Estimate of 94 cents.
TCBI’s results were aided by rising revenues and improving capital ratios. However, its performance was affected by increased expenses and deteriorating credit quality.
Huntington Bancshares Incorporated (HBAN - Free Report) reported second-quarter 2023 earnings per share of 35 cents, surpassing the Zacks Consensus Estimate of 34 cents. The metric remained flat from the prior-year figure.
HBAN’s results were benefited from increases in NII and non-interest income. However, a rise in expenses and higher provision for credit losses were headwinds.