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BOK Financials' (BOKF) Q4 Earnings Beat, Revenues Fall Y/Y
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BOK Financial Corporation’s (BOKF - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.72. The bottom line compared unfavorably to the earnings of $2.51 per share a year ago.
The results benefited from a rise in total fees and commissions and higher loans and deposit balances. Moreover, the provisions witnessed a significant decline. However, lower net interest revenues and elevated expenses were the major undermining factors.
The results excluded the charges related to the FDIC special assessment. After considering it, net income attributable to shareholders was $82.6 million, down 51% year over year.
In 2023, earnings per share were $8.02, up 4.4% from 2022. However, the figure missed the Zacks Consensus Estimate of $8.49. Net income attributable to shareholders (GAAP) was $530.7 million, up 2% year over year.
Quarterly Revenues Decline, Expenses Rise
Quarterly net revenues of $501.6 million (net interest revenues and total other operating revenues) were down 8.8% year over year. However, the top line surpassed the Zacks Consensus Estimate of $485.9 million.
In 2023, total revenues were $2.06 billion, up 11.2% year over year. The top line surpassed the Zacks Consensus Estimate of $2.05 billion.
Net interest revenues were $296.7 million, down 15.9% year over year. Net interest margin (NIM) deteriorated 90 basis points to 2.64%.
Total fees and commissions were $196.8 million, up 1.7% year over year. The rise was driven by an increase in almost all fee income components except for brokerage and trading revenues and other revenues. Total other operating expenses were $384.1 million, up 20.6% year over year. The rise was primarily due to an increase in both personnel and non-personnel expenses and $43.8 million of charges related to FDIC special assessment.
The efficiency ratio increased to 71.62% from the prior year’s 56.61%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Dec 31, 2023, total loans were $23.9 billion, up marginally from the previous quarter. Total deposits amounted to $34 billion, up 1.1%.
Credit Quality Improves
Non-performing assets were $148.3 million or 0.62% of outstanding loans and repossessed assets as of Dec 31, 2023, which declined from $299.6 million or 1.33% recorded in the year-ago period.
Provisions for credit losses was recorded at $6 million, which decreased 60% from the prior-year quarter. Also, the company recorded net charge-offs of $4.1 million, which decreased 73.6% from the prior-year quarter.
However, the allowance for loan losses was 1.16% of outstanding loans as of Dec 31, 2023, which increased from 1.04% year over year.
Capital Ratios Improve & Profitability Ratios Decline
As of Dec 31, 2023, common equity Tier 1 capital ratio was 12.06%, which rose from 11.69% as of Dec 31, 2022. Tier 1 and total capital ratios were 12.07% and 13.16%, which increased from 11.71% and 12.67%, respectively, as of Dec 31, 2022.
The leverage ratio was 9.45%, which declined from 9.91% as of Dec 31, 2022.
Return on average equity was 6.64%, down from the year-earlier quarter’s 14.48%. Return on average assets was 0.66%, down from 1.48% in the year-ago quarter.
Share Repurchase Update
During the fourth quarter, BOKF repurchased 0.7 million shares at an average price of $70.99 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances and higher interest rates. Declining provisions will also support the company’s financials. However, a decline in non-interest revenues and elevated expenses are near-term concerns.
BOK Financial Corporation Price, Consensus and EPS Surprise
Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.08. Adjusted earnings per share, however, compared unfavorably with $1.65 earned in the year-ago quarter.
HWC’s results were impacted by a decline in both NII and non-interest income. Further, a slight decrease in loan balances and an increase in expenses and provisions acted as spoilsports.
WaFd, Inc.’s (WAFD - Free Report) first-quarter fiscal 2024 (ended Dec 31) earnings of 85 cents per share surpassed the Zacks Consensus Estimate of 72 cents. However, the bottom line declined 26.7% year over year.
WAFD’s results primarily benefited from the rise in other income and steady loan balance. In the reported quarter, the company did not record any provision for credit losses. However, a fall in NII and an increase in other expenses acted as spoilsports.
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BOK Financials' (BOKF) Q4 Earnings Beat, Revenues Fall Y/Y
BOK Financial Corporation’s (BOKF - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.72. The bottom line compared unfavorably to the earnings of $2.51 per share a year ago.
The results benefited from a rise in total fees and commissions and higher loans and deposit balances. Moreover, the provisions witnessed a significant decline. However, lower net interest revenues and elevated expenses were the major undermining factors.
The results excluded the charges related to the FDIC special assessment. After considering it, net income attributable to shareholders was $82.6 million, down 51% year over year.
In 2023, earnings per share were $8.02, up 4.4% from 2022. However, the figure missed the Zacks Consensus Estimate of $8.49. Net income attributable to shareholders (GAAP) was $530.7 million, up 2% year over year.
Quarterly Revenues Decline, Expenses Rise
Quarterly net revenues of $501.6 million (net interest revenues and total other operating revenues) were down 8.8% year over year. However, the top line surpassed the Zacks Consensus Estimate of $485.9 million.
In 2023, total revenues were $2.06 billion, up 11.2% year over year. The top line surpassed the Zacks Consensus Estimate of $2.05 billion.
Net interest revenues were $296.7 million, down 15.9% year over year. Net interest margin (NIM) deteriorated 90 basis points to 2.64%.
Total fees and commissions were $196.8 million, up 1.7% year over year. The rise was driven by an increase in almost all fee income components except for brokerage and trading revenues and other revenues. Total other operating expenses were $384.1 million, up 20.6% year over year. The rise was primarily due to an increase in both personnel and non-personnel expenses and $43.8 million of charges related to FDIC special assessment.
The efficiency ratio increased to 71.62% from the prior year’s 56.61%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Dec 31, 2023, total loans were $23.9 billion, up marginally from the previous quarter. Total deposits amounted to $34 billion, up 1.1%.
Credit Quality Improves
Non-performing assets were $148.3 million or 0.62% of outstanding loans and repossessed assets as of Dec 31, 2023, which declined from $299.6 million or 1.33% recorded in the year-ago period.
Provisions for credit losses was recorded at $6 million, which decreased 60% from the prior-year quarter. Also, the company recorded net charge-offs of $4.1 million, which decreased 73.6% from the prior-year quarter.
However, the allowance for loan losses was 1.16% of outstanding loans as of Dec 31, 2023, which increased from 1.04% year over year.
Capital Ratios Improve & Profitability Ratios Decline
As of Dec 31, 2023, common equity Tier 1 capital ratio was 12.06%, which rose from 11.69% as of Dec 31, 2022. Tier 1 and total capital ratios were 12.07% and 13.16%, which increased from 11.71% and 12.67%, respectively, as of Dec 31, 2022.
The leverage ratio was 9.45%, which declined from 9.91% as of Dec 31, 2022.
Return on average equity was 6.64%, down from the year-earlier quarter’s 14.48%. Return on average assets was 0.66%, down from 1.48% in the year-ago quarter.
Share Repurchase Update
During the fourth quarter, BOKF repurchased 0.7 million shares at an average price of $70.99 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances and higher interest rates. Declining provisions will also support the company’s financials. However, a decline in non-interest revenues and elevated expenses are near-term concerns.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation price-consensus-eps-surprise-chart | BOK Financial Corporation Quote
The company 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
Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.08. Adjusted earnings per share, however, compared unfavorably with $1.65 earned in the year-ago quarter.
HWC’s results were impacted by a decline in both NII and non-interest income. Further, a slight decrease in loan balances and an increase in expenses and provisions acted as spoilsports.
WaFd, Inc.’s (WAFD - Free Report) first-quarter fiscal 2024 (ended Dec 31) earnings of 85 cents per share surpassed the Zacks Consensus Estimate of 72 cents. However, the bottom line declined 26.7% year over year.
WAFD’s results primarily benefited from the rise in other income and steady loan balance. In the reported quarter, the company did not record any provision for credit losses. However, a fall in NII and an increase in other expenses acted as spoilsports.