• Earnings: $119.8 million or EPS of $1.86 per diluted share.
• Tangible Common Equity (TCE): 9.5%.
• Common Equity Tier 1 (CET1): 13.3%.
• Loan-to-Deposit Ratio: 62%.
• Allowance for Credit Losses: $331 million or 1.4% of outstanding loans.
• Net Interest Income: Increased by $3.2 million.
• Net Interest Margin: Expanded by 3 basis points.
• Total Fee Income: Decreased by $22.8 million, contributing $184.1 million to revenue.
• Trading Revenue: $23.3 million, down from $37.7 million in the prior quarter.
• Mortgage Banking Revenue: Increased by $1.7 million to $19.8 million.
• Non-Performing Assets: Increased by $36 million to $79 million.
• Net Charge-Offs: $1.1 million during the quarter.
• Personnel Expenses: Increased by $3.5 million.
• Non-Personnel Expense: Decreased by $3.6 million.

• Warning! GuruFocus has detected 3 Warning Sign with BOKF.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BOK Financial Corp (NASDAQ:BOKF) reported strong earnings of $119.8 million or EPS of $1.86 per diluted share for the first quarter.
• The company's capital levels remain robust, with TCE reaching 9.5% and CET1 at 13.3%, providing insulation from market disruptions.
• BOK Financial Corp's loan-to-deposit ratio is low at 62%, indicating a strong liquidity position.
• Net interest income was strong, with continued net interest margin expansion for the third consecutive quarter.
• Credit quality remains exceptional, with minimal net charge-offs and a healthy allowance for credit losses at 1.4% of outstanding loans.

Negative Points

• Total fee income decreased by $22.8 million on a linked-quarter basis, impacted by market volatility and lower trading volumes.
• Loan growth was challenging, with a contraction in the loan portfolio mainly driven by a 12.1% decrease in energy loans.
• Non-performing assets not guaranteed by the US government increased by $36 million, although they remain low historically.
• The healthcare business loans decreased by 4.5% linked quarter due to elevated payoff levels.
• The trading business experienced a decline in revenue due to compressed trading volumes and spreads amid market uncertainty.

Q & A Highlights

Q: Can you explain the decline in trading revenue and whether it will normalize? A: Stacy Kymes, CEO, explained that the decline was volume-driven due to market uncertainties, but expects trading activity to rebound in the second quarter. Scott Grauer, EVP of Wealth Management, added that trading started strong in January but was impacted by economic uncertainties in February and March. They anticipate a return to normal levels as market conditions stabilize.

Q: How do you view the pressure on energy and healthcare loan balances? A: Stacy Kymes noted that while energy loans have been under pressure, they expect stabilization soon. The healthcare sector also shows positive early trends, and they do not anticipate the same headwinds in the coming quarters as seen previously.

Q: Will the allowance for credit losses (ACL) ratio grow over the year? A: Stacy Kymes stated that they do not expect to grow the ACL ratio. The current credit quality and balance levels suggest a stable reserve, and any adjustments would be based on judgmental additions rather than necessity.

Q: Can you provide an update on loan growth outlook and the mortgage finance business? A: Stacy Kymes mentioned that loan pipelines are strong, but borrower uncertainty could affect closures. The mortgage finance business is progressing well, with leadership and operations in place, and is expected to contribute positively to loan growth by year-end.

Q: How does the current energy market compare to the downturn from 2014-2017? A: Stacy Kymes highlighted significant differences, such as lower leverage and better hedging practices today. Current leverage in the energy portfolio is less than one time, and extensive hedging mitigates risks, making the current environment more stable than the past downturn.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.