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BOK Financial (BOKF) Up 3.1% as Q2 Earnings Beat Estimates
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BOK Financial Corporation’s (BOKF - Free Report) second-quarter 2024 adjusted earnings per share (EPS) of $2.02 beat the Zacks Consensus Estimate of $1.89. The bottom line fell short of earnings of $2.27 reported a year ago.
Shares of BOKF have moved up 3.1% following the release of its higher-than-expected earnings.
The results benefited from higher loans and deposit balances. Moreover, a decline in provisions was another positive. Lower net interest revenues was major undermining factor.
The results excluded the gain on the conversion of Visa shares, the additional FDIC special assessment expense and the contribution of Visa shares to the BOKF Foundation. After considering it, net income attributable to shareholders was $131.1 million, down 14.6% year over year.
Quarterly Revenues & Expenses Decline
Quarterly net revenues of $496.1 million (net interest revenues and total other operating revenues) were down 6.6% year over year. The top line missed the Zacks Consensus Estimate of $520.4 million.
Net interest revenues were $296 million, down 8.1% year over year. Net interest margin deteriorated 44 basis points to 2.56%.
Total fees and commissions were $200 million, down 0.2% year over year. The upside was driven by higher fiduciary and asset management revenue and transaction card revenues, offset by lower brokerage and trading revenues.
Total other operating expenses were $336.7 million, down 1.1% year over year. The downside was primarily due to a reduction in personnel expenses.
The efficiency ratio increased to 59.83% from the prior year’s 58.75%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Jun 30, 2024, total loans were $24.6 billion, up 5.7% from the year-ago quarter’s levels. Total deposits amounted to $36.2 billion, up 8.0% from the year-ago quarter’s reported figure.
Credit Quality: Mixed Bag
Non-performing assets were $93 million or 0.38% of outstanding loans and repossessed assets as of Jun 30, 2023, which declined from $136.5 million or 0.59% recorded in the prior-year quarter.
Provisions for credit losses were $8 million, down 52.9% from the prior-year quarter’s levels.
The company recorded net charge-offs of $6.9 million, up 3.6% from the prior-year quarter’s tally.
Further, the allowance for loan losses was 1.17% of outstanding loans as of Jun 30, 2024, up from 1.13% reported in the year-ago quarter.
Capital Ratios & Profitability Ratios
As of Jun 30, 2024, the common equity Tier 1 capital ratio was 12.10%, which declined from 12.12% as of Jun 30, 2023. Tier 1 capital ratio and total capital ratios were 12.11% and 13.25% compared with 12.13% and 13.24%, respectively, as of Jun 30, 2023.
The leverage ratio was 9.39%, which declined from 9.75% as of Jun 30, 2023.
Return on average equity was 12.79%, up from the year-earlier quarter’s 12.28%. Return on average assets was 1.29%, up from 1.27% reported in the year-ago quarter.
Share Repurchase Update
During the second quarter, BOKF repurchased approximately 0.41 million shares at an average price of $90.38 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances. Declining provisions support the company’s financials. However, a decline in net interest revenues is near-term concern.
BOK Financial Corporation Price, Consensus and EPS Surprise
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. The bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were undermining factors.
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BOK Financial (BOKF) Up 3.1% as Q2 Earnings Beat Estimates
BOK Financial Corporation’s (BOKF - Free Report) second-quarter 2024 adjusted earnings per share (EPS) of $2.02 beat the Zacks Consensus Estimate of $1.89. The bottom line fell short of earnings of $2.27 reported a year ago.
Shares of BOKF have moved up 3.1% following the release of its higher-than-expected earnings.
The results benefited from higher loans and deposit balances. Moreover, a decline in provisions was another positive. Lower net interest revenues was major undermining factor.
The results excluded the gain on the conversion of Visa shares, the additional FDIC special assessment expense and the contribution of Visa shares to the BOKF Foundation. After considering it, net income attributable to shareholders was $131.1 million, down 14.6% year over year.
Quarterly Revenues & Expenses Decline
Quarterly net revenues of $496.1 million (net interest revenues and total other operating revenues) were down 6.6% year over year. The top line missed the Zacks Consensus Estimate of $520.4 million.
Net interest revenues were $296 million, down 8.1% year over year. Net interest margin deteriorated 44 basis points to 2.56%.
Total fees and commissions were $200 million, down 0.2% year over year. The upside was driven by higher fiduciary and asset management revenue and transaction card revenues, offset by lower brokerage and trading revenues.
Total other operating expenses were $336.7 million, down 1.1% year over year. The downside was primarily due to a reduction in personnel expenses.
The efficiency ratio increased to 59.83% from the prior year’s 58.75%. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Jun 30, 2024, total loans were $24.6 billion, up 5.7% from the year-ago quarter’s levels. Total deposits amounted to $36.2 billion, up 8.0% from the year-ago quarter’s reported figure.
Credit Quality: Mixed Bag
Non-performing assets were $93 million or 0.38% of outstanding loans and repossessed assets as of Jun 30, 2023, which declined from $136.5 million or 0.59% recorded in the prior-year quarter.
Provisions for credit losses were $8 million, down 52.9% from the prior-year quarter’s levels.
The company recorded net charge-offs of $6.9 million, up 3.6% from the prior-year quarter’s tally.
Further, the allowance for loan losses was 1.17% of outstanding loans as of Jun 30, 2024, up from 1.13% reported in the year-ago quarter.
Capital Ratios & Profitability Ratios
As of Jun 30, 2024, the common equity Tier 1 capital ratio was 12.10%, which declined from 12.12% as of Jun 30, 2023. Tier 1 capital ratio and total capital ratios were 12.11% and 13.25% compared with 12.13% and 13.24%, respectively, as of Jun 30, 2023.
The leverage ratio was 9.39%, which declined from 9.75% as of Jun 30, 2023.
Return on average equity was 12.79%, up from the year-earlier quarter’s 12.28%. Return on average assets was 1.29%, up from 1.27% reported in the year-ago quarter.
Share Repurchase Update
During the second quarter, BOKF repurchased approximately 0.41 million shares at an average price of $90.38 per share.
Our View
BOK Financial is poised to benefit from solid loan and deposit balances. Declining provisions support the company’s financials. However, a decline in net interest revenues is near-term concern.
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
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. The bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were undermining factors.