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BOK FINANCIAL CORP (BOKF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 EPS was $2.12 on net income of $136.2M; total revenue was approximately $523.1M (net interest income $313.0M plus other operating revenue $210.0M). Net interest margin expanded 7 bps to 2.75%, and core NIM ex-trading also rose 7 bps .
  • Fee income contributed $206.9M (40% of revenue), highlighted by a 39.8% rebound in trading fees to $33.1M and solid fiduciary/asset management growth; AUMA reached $114.6B .
  • Credit quality remained exceptional: NPAs fell ~47.6% sequentially to the lowest level in 20 years; nonaccruals dropped to $46.7M, and there was no provision in Q4; loan-to-deposit ratio improved to 63% on $964M deposit growth .
  • 2025 guidance: NII $1.325–$1.375B, fees $810–$830M, total revenue mid–upper single-digit growth, expenses mid-single-digit, efficiency ~65%; management expects trading revenue to mix-shift toward NII with an assumed two 25 bp Fed cuts (May/Sept) .
  • Potential stock catalysts: continued margin tailwinds from down-rate deposit betas, steepening yield curve boosting trading NII spread, sustained C&I growth (Texas momentum), and exceptionally low NPAs underpinning benign charge-offs .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and NII growth: headline and core NIM both up 7 bps; NII +$4.9M QoQ, supported by deposit repricing, fixed-rate asset cash-flow reinvestment at higher yields, and DDA growth .
  • Diversified fee engine: trading fees rebounded 39.8% to $33.1M, syndication fees rose $1.4M; AUMA up $3.9B QoQ and fiduciary revenue +$3.2M; fee contribution ~40% of revenue .
  • Exceptional credit and liquidity: NPAs at 0.20% (lowest in 20 years), net charge-offs only $528K; deposit growth of $964M reduced L/D to 63% and bolstered secured capacity .

Management quotes:

  • “Net interest margin expanded 7 basis points… liabilities repriced more quickly than assets in response to rate cuts” – CFO Martin Grunst .
  • “Fee income segments have begun to deliver a 40% contribution to revenue… ranked at the top of regional banks” – EVP Scott Grauer .
  • “Credit quality remains exceptional… nonperforming assets… lowest levels we've seen in the last 20 years” – EVP Marc Maun .

What Went Wrong

  • CRE balances fell 2.5% QoQ with declines across industrial, office, retail; healthcare loans decreased 4.4% QoQ amid refinancing into fixed-rate HUD market .
  • Investment banking fees fell $5.5M off a record Q3 quarter; total markets & securities flat YoY .
  • Expenses rose $6.6M QoQ (+1.9%) on higher personnel, professional fees, and business promotion; efficiency ratio ticked up to 65.6% .

Analyst concerns discussed:

  • NII growth path: need for clarity on launch point and quarterly cadence; management explained trading NII spread expansion from ~36 bps in Q4 toward ~100+ bps in 2025 with assumed rate cuts .
  • Yield curve assumptions: guidance assumes flat long rates, lower short rates; curve improves modestly without adding steepness beyond short-end changes .
  • Loan growth timing: specialty lines (energy, healthcare, CRE) were headwinds in 2024; expected to normalize in 2025 alongside continued core C&I growth .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$501.6 = $296.7 + $204.9 $516.3 = $308.1 + $208.2 $523.1 = $313.0 + $210.0
Net Interest Income ($USD Millions)$296.7 $308.1 $313.0
Other Operating Revenue ($USD Millions)$204.9 $208.2 $210.0
Diluted EPS ($USD)$1.26 $2.18 $2.12
Net Interest Margin (%)2.64% 2.68% 2.75%
Efficiency Ratio (%)71.6% 65.1% 65.6%

Segment breakdown – fees and trading:

MetricQ4 2023Q3 2024Q4 2024
Trading Fees ($USD Millions)$35.5 $23.6 $33.1
Trading NII ($USD Millions)$(3.3) $3.8 $4.6
Total Trading Revenue ($USD Millions)$32.2 $27.4 $37.7
Fiduciary & Asset Mgmt ($USD Millions)$51.4 $57.4 $60.6
Transaction Card ($USD Millions)$28.8 $28.5 $27.6
Deposit Service Charges ($USD Millions)$27.8 $30.5 $30.0
Mortgage Banking ($USD Millions)$12.8 $18.4 $18.1
Other Revenue ($USD Millions)$15.0 $17.4 $15.0
Total Fees & Commissions ($USD Millions)$196.8 $202.5 $206.9

KPIs and balance sheet:

KPIQ4 2023Q3 2024Q4 2024
Period-End Loans ($B)$23.905 $23.985 $24.115
Average Loans ($B)$23.705 $24.305 $24.025
Period-End Deposits ($B)$34.020 $37.227 $38.191
Average Deposits ($B)$33.676 $36.760 $37.819
Loan-to-Deposit Ratio (%)70.3% 64.4% 63.1%
Nonperforming Assets ($M)$148.3 $86.9 $49.0
NPAs (% of loans + repossessed assets)0.62% 0.36% 0.20%
Nonaccruing Loans ($M)$145.5 $84.3 $46.7
Combined Allowance (% of loans)1.36% 1.39% 1.38%
AUMA/AUM+Admin ($B)N/A$110.7 $114.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EOP Loans GrowthFY 2025N/AMid to upper single-digit growthIntroduced
Net Interest Income ($B)FY 2025N/A$1.325–$1.375Introduced; assumes two cuts; trading mix shift to NII
Fees & Commissions ($M)FY 2025N/A$810–$830Introduced; ex-trading mid–upper single-digit
Total Revenue GrowthFY 2025N/AMid–upper single-digitIntroduced
Expenses GrowthFY 2025N/AMid single-digitIntroduced
Efficiency Ratio (%)FY 2025N/A~65%; declining quarterly trendIntroduced
Provision Expense ($M)FY 2025N/A$20–$40Introduced; benign charge-offs expected
Rate AssumptionsFY 2025N/ATwo 25 bp cuts (May/Sept); long rates flatIntroduced
Trading Revenue MixFY 2025N/AShift from fees to NIIIntroduced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Net interest margin & deposit betasQ2: deposit cost increases slowed; core NIM stable; down-rate betas mid-50s expected . Q3: NIM +12 bps; deposit repricing executed on Fed cut .NIM +7 bps; liabilities repriced faster; confidence in deposit betas as rates decline .Improving margin trajectory
C&I loan growthQ2: 13% annualized (9.5% ex-seasonal) core C&I growth . Q3: year-over-year core C&I +6.4%; Texas momentum building .Core C&I +2.7% QoQ; +8.1% YoY; Texas C&I strong .Sustained growth; Texas accelerating
CRE dynamicsQ2: normal payoff cycle; concentration disciplined . Q3: CRE +2.1% QoQ as construction funds up; concentration at 157% .CRE –2.5% QoQ; rebuilding expected as new projects fund up .Near-term headwind; rebuild over time
Energy lendingQ2: modest growth; strong hedging; lower leverage . Q3: balances down on capital markets activity/M&A .Energy +4.1% QoQ; new relationships drove growth; outlook constructive .Turning to growth
Trading revenue mix & yieldsQ3: trading fees down; total trading revenue stable; mix topic introduced .Q4: trading fees rebounded; trading NII spread 36 bps, rising toward 100+ bps over 2025 .Shift toward NII expected
Mortgage bankingQ2/Q3: steady; industry volumes low but improving .Q4: $18.1M; MSR FV +$20.5M offset by hedge losses .Stable with incremental improvement
AUMA & fiduciaryQ2/Q3: strong AUMA growth; plateaus around $110B .Q4: AUMA $114.6B; fiduciary revenue +5.6% QoQ .Positive momentum
Capital/TCE & liquidityQ2: CET1 12.1%; TCE 8.38%; L/D 68% . Q3: CET1 12.73%; TCE 9.22%; L/D 64% .CET1 13.03%; TCE 9.17%; L/D 63%; deposits +$964M .Strengthening

Management Commentary

  • CEO: “We are pleased to report earnings of $136.2 million… EPS of $2.12… TCE ratio at quarter end was 9.2%… placed us in the top 1/3 of the KRX Index… I’m proud… have high expectations about the trajectory of our organization” – Stacy Kymes .
  • CFO: “Net interest income was up $4.9M… headline and core NIM expanded 7 bps… deposit pricing leverage was evident… liabilities repriced more quickly than assets… gives us great confidence in… deposit beta expectations” – Martin Grunst .
  • Regional Banking: “Credit quality remains exceptional… NPAs not guaranteed… decreased $38M to $42M… lowest levels in 20 years… NCOs averaged 5 bps over last 12 months” – Marc Maun .
  • Wealth Management: “Trading fees rebounded… $33.1M… Mortgage banking revenue remained steady… AUMA eclipsing $114B… consistent results speak for themselves” – Scott Grauer .

Q&A Highlights

  • NII guidance and cadence: Management split outlook into core NII ex-trading (mid–upper single-digit growth) and trading NII, with spreads expected to widen toward ~100+ bps over 2025 as short rates decline; total revenue mid–upper single-digit viewed as attainable .
  • Yield curve assumption: Long-term rates held roughly flat; short end declines with two cuts; modest curve improvement implied by short-end moves .
  • Loan growth normalization: Specialty lines (energy/healthcare/CRE) expected to return to normal growth patterns; core C&I growth sustainable; ample concentration headroom .
  • Deposits: Growth broad-based across commercial, consumer, and wealth; strategy unchanged; lower price competitiveness vs past year supported deposit cost management .
  • Expenses: Mid-single-digit growth driven by talent investments and IT; variable components tied to transactional businesses may swing to higher end with revenue .
  • Energy outlook under new administration: Too early to know precise impact; policy may be supportive (lands, permitting, SPR), while borrowers remain disciplined based on hedging economics .
  • Mortgage warehouse and talent lift-outs: Active investment in mortgage warehouse lending and continued targeted revenue-producer hiring across markets (including San Antonio) .

Estimates Context

  • Wall Street consensus EPS and revenue estimates from S&P Global were unavailable due to a provider limit at the time of query; therefore, “vs. estimates” comparisons are not included. Management’s guidance implies upward bias to revenue through margin expansion and trading NII mix shift .
  • Where estimates may need to adjust: Rising core and trading NII, deposit beta tailwinds, and exceptionally low NPAs support upward revisions to NII and total revenue trajectories; investment banking seasonality and CRE rebuild timing remain variables .

Key Takeaways for Investors

  • Margin expansion is intact and broad-based: both headline and core NIM rose 7 bps, with further tailwinds expected from down-rate deposit betas and fixed-rate asset cash-flow reinvestments; this is a core near-term driver for earnings power .
  • Trading revenue mix shift should lift NII in 2025: spreads on the ~$5.5–$6.0B trading portfolio are poised to widen materially as short rates decline; total trading revenue grows even if fees decline, supporting overall revenue growth .
  • Credit risk remains exceptionally low: NPAs at 0.20%; negligible net charge-offs; allowance robust at 1.38%—supports modest provision outlook and stable capital .
  • Core C&I and Texas momentum are offsets to specialty headwinds: sustained C&I growth (+8.1% YoY) and Texas C&I strength underpin loan growth even as healthcare/CRE payoffs cycle; energy turned to growth in Q4 .
  • Liquidity and capital provide flexibility: deposits +$964M; L/D 63%; CET1 13.03% and TCE ~9.2% enable opportunistic pricing and support growth investments .
  • Watch CRE rebuild and investment banking seasonality: CRE balances fell QoQ but management expects funding of new construction to rebuild; investment banking was down off a record Q3—seasonal rebound likely with Texas municipal cycles .
  • 2025 outlook is constructive: NII raised to $1.325–$1.375B with expense discipline (~mid-single-digit) and efficiency ~65%; two cuts assumed and flat long rates—scenario supports mid–upper single-digit total revenue growth .
Note: S&P Global consensus estimates were unavailable at query time; comparisons to Wall Street estimates are omitted.

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