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BOK Financial's Q1 Earnings Miss on Lower Fee Income, Stock Slides
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Shares of BOK Financial Corporation (BOKF - Free Report) lost 2.3% in after-hours trading in response to lower-than-expected first-quarter 2025 results. Earnings of $1.86 per share lagged the Zacks Consensus Estimate of $2.01. However, the bottom line grew 44.2% from the prior-year quarter.
BOKF’s results were adversely impacted by lower total fees and commissions, the decline in loan balance and higher operating expenses. On the other hand, higher net interest income (NII), a rise in deposits and the absence of provisions offered some support.
Net income attributable to shareholders was $119.8 million, jumping 43.1% year over year.
BOKF’s Revenues Rise, Expenses Up
Quarterly net revenues of $502.3 million (net interest income and total other operating revenues) rose 10.3% year over year. The top line missed the Zacks Consensus Estimate of $518.5 million.
Net interest income was $316.3 million, up 7.7%. The net interest margin expanded 17 basis points to 2.78%.
Total fees and commissions were $184.1 million, down 8.2%. The fall was mainly due to lower brokerage and trading revenues.
Total other operating expenses were $347.5 million, up 2.1% year over year. This rise mainly resulted from higher personnel expenses.
The efficiency ratio rose to 68.31% from the prior year’s 67.13%. A rise in the efficiency ratio indicates a deterioration in profitability.
BOK Financial’s Loan Balance Declines, Deposits Rise
As of March 31, 2025, total loans were $23.7 billion, down 1.8% from the prior quarter. The decline was primarily due to a fall in commercial loans, partially offset by growth in commercial real estate loans and loans to individuals.
Total deposits rose 1.4% sequentially to $38.4 billion. The increase was driven by interest-bearing transaction deposits and savings.
BOKF Credit Quality Improves
Non-performing assets were $85 million or 0.36% of outstanding loans and repossessed assets as of March 31, 2025, which decreased from $122.4 million or 0.51% in the prior-year quarter.
The company recorded nil provisions for credit losses compared with $8 million in the prior-year quarter. BOKF recorded net charge-offs of $1.1 million, down 79.8%.
The allowance for loan losses was 1.18% of outstanding loans as of March 31, 2025, which grew 1 bp from the year-ago quarter.
BOKF’s Capital & Profitability Ratios Improve
As of March 31, 2025, the common equity Tier 1 capital ratio was 13.31%, up from 11.99% as of March 31, 2024. The tier 1 capital ratio and total capital ratio were 13.31% and 14.54% compared with 12.00% and 13.15%, respectively, as of March 31, 2024.
At the end of the first quarter, return on average equity was 8.59%, up from the year-earlier quarter’s 6.53%. Return on average assets was 0.95%, up from 0.67% a year ago.
BOK Financial’s Share Repurchase Update
During the reported quarter, BOK Financial repurchased 10,000 shares for $0.99 million.
Our View on BOK Financial
BOK Financial’s solid loan and deposit balance will continue to support its top-line growth. Further, improving asset quality is a major positive for the company amid a challenging operating backdrop.
BOK Financial Corporation Price, Consensus and EPS Surprise
Here are the performances of BOK Financial’s peer banks. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
First Horizon Corporation’s (FHN - Free Report) first-quarter 2025 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 40 cents. This compares favorably with 35 cents reported in the year-ago quarter.
Results benefited from a marginal rise in NII and a decline in expenses. Lower provisions were another positive. However, a fall in fee income and a deteriorating capital position were major headwinds for First Horizon.
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2025 adjusted earnings per share of 92 cents, which missed the Zacks Consensus Estimate of 99 cents. However, the figure compared favorably with 62 cents in the year-ago quarter.
TCBI's results were adversely impacted by a rise in expenses and a decline in the loan balance. Nonetheless, an increase in NII, non-interest income and higher deposit balances acted as a tailwind.
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BOK Financial's Q1 Earnings Miss on Lower Fee Income, Stock Slides
Shares of BOK Financial Corporation (BOKF - Free Report) lost 2.3% in after-hours trading in response to lower-than-expected first-quarter 2025 results. Earnings of $1.86 per share lagged the Zacks Consensus Estimate of $2.01. However, the bottom line grew 44.2% from the prior-year quarter.
BOKF’s results were adversely impacted by lower total fees and commissions, the decline in loan balance and higher operating expenses. On the other hand, higher net interest income (NII), a rise in deposits and the absence of provisions offered some support.
Net income attributable to shareholders was $119.8 million, jumping 43.1% year over year.
BOKF’s Revenues Rise, Expenses Up
Quarterly net revenues of $502.3 million (net interest income and total other operating revenues) rose 10.3% year over year. The top line missed the Zacks Consensus Estimate of $518.5 million.
Net interest income was $316.3 million, up 7.7%. The net interest margin expanded 17 basis points to 2.78%.
Total fees and commissions were $184.1 million, down 8.2%. The fall was mainly due to lower brokerage and trading revenues.
Total other operating expenses were $347.5 million, up 2.1% year over year. This rise mainly resulted from higher personnel expenses.
The efficiency ratio rose to 68.31% from the prior year’s 67.13%. A rise in the efficiency ratio indicates a deterioration in profitability.
BOK Financial’s Loan Balance Declines, Deposits Rise
As of March 31, 2025, total loans were $23.7 billion, down 1.8% from the prior quarter. The decline was primarily due to a fall in commercial loans, partially offset by growth in commercial real estate loans and loans to individuals.
Total deposits rose 1.4% sequentially to $38.4 billion. The increase was driven by interest-bearing transaction deposits and savings.
BOKF Credit Quality Improves
Non-performing assets were $85 million or 0.36% of outstanding loans and repossessed assets as of March 31, 2025, which decreased from $122.4 million or 0.51% in the prior-year quarter.
The company recorded nil provisions for credit losses compared with $8 million in the prior-year quarter. BOKF recorded net charge-offs of $1.1 million, down 79.8%.
The allowance for loan losses was 1.18% of outstanding loans as of March 31, 2025, which grew 1 bp from the year-ago quarter.
BOKF’s Capital & Profitability Ratios Improve
As of March 31, 2025, the common equity Tier 1 capital ratio was 13.31%, up from 11.99% as of March 31, 2024. The tier 1 capital ratio and total capital ratio were 13.31% and 14.54% compared with 12.00% and 13.15%, respectively, as of March 31, 2024.
At the end of the first quarter, return on average equity was 8.59%, up from the year-earlier quarter’s 6.53%. Return on average assets was 0.95%, up from 0.67% a year ago.
BOK Financial’s Share Repurchase Update
During the reported quarter, BOK Financial repurchased 10,000 shares for $0.99 million.
Our View on BOK Financial
BOK Financial’s solid loan and deposit balance will continue to support its top-line growth. Further, improving asset quality is a major positive for the company amid a challenging operating backdrop.
BOK Financial Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation price-consensus-eps-surprise-chart | BOK Financial Corporation Quote
Currently, BOK Financial carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of BOKF’s Peer Banks
Here are the performances of BOK Financial’s peer banks. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
First Horizon Corporation’s (FHN - Free Report) first-quarter 2025 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 40 cents. This compares favorably with 35 cents reported in the year-ago quarter.
Results benefited from a marginal rise in NII and a decline in expenses. Lower provisions were another positive. However, a fall in fee income and a deteriorating capital position were major headwinds for First Horizon.
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2025 adjusted earnings per share of 92 cents, which missed the Zacks Consensus Estimate of 99 cents. However, the figure compared favorably with 62 cents in the year-ago quarter.
TCBI's results were adversely impacted by a rise in expenses and a decline in the loan balance. Nonetheless, an increase in NII, non-interest income and higher deposit balances acted as a tailwind.