• Earnings (Q4): $136.2 million or EPS of $2.12 per diluted share.
• Earnings (Full Year 2024): $523.6 million or EPS of $8.14.
• Net Interest Income: Increased by $4.9 million.
• Net Interest Margin: Expanded by 7 basis points.
• Loan Growth (C&I Portfolio): 8.1% year over year.
• Loan Growth (Texas C&I): 9.8% year over year.
• Allowance for Credit Losses: $332 million or 1.38% of outstanding loans.
• Net Charge Off Rate: 5 basis points annualized.
• Fee Income Contribution: $206.9 million, accounting for 40% of total revenue.
• Trading Fees: Increased 39.8% to $33.1 million.
• Asset Management Revenue: Grew $3.2 million or 5.6% linked quarter.
• Total Shareholder Return: 27%, outperforming the KRX index return of 13%.
• Tangible Common Equity (TCE) Ratio: 9.2% at quarter end.
• Nonperforming Assets: Decreased $38 million to $42 million.
• Expenses: Increased $6.6 million or 1.9% linked quarter.

• Warning! GuruFocus has detected 7 Warning Signs with BOKF.

Release Date: January 21, 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 $136.2 million for the fourth quarter and $523.6 million for the full year, marking the second highest full year EPS in the company's history.
• The company's net interest income was solid, with effective deposit pricing strategies contributing to a strong outlook for margin.
• Credit performance remains exceptional, with criticized/classified levels below pre-pandemic norms and a low net charge-off rate of 5 basis points.
• Core C&I loan growth was robust at 8.1% year-over-year, with significant growth in the Texas market, particularly in San Antonio.
• Fee income segments contributed 40% to total revenue, ranking BOK Financial Corp at the top among regional banks, and total shareholder return was 27%, outperforming the KRX index return of 13%.

Negative Points

• Commercial real estate loan balances fell by 2.5% quarter-over-quarter, reflecting payoff activity in specialized lines of business.
• Healthcare business loans decreased by 4.4% linked quarter due to payoff activity into the fixed rate HUD market.
• Investment banking fees were down $5.5 million from the previous quarter, although this followed a record quarter.
• Total expenses increased by $6.6 million or 1.9% linked quarter, driven by personnel expenses and project-related professional fees.
• The company faces challenges in sustaining loan growth due to unexpected headwinds in core specialty businesses like healthcare, commercial real estate, and energy.

Q & A Highlights

Q: Can you talk a little bit more about the payoff activity and some of the expected changes you're thinking about in '25? A: Stacy Kymes, CEO, explained that the unexpected headwind was in core specialty businesses like healthcare, commercial real estate, and energy due to capital market timing and yield curve shape. They expect these to return to normal growth patterns and sustain C&I growth, making their loan growth guidance for next year achievable.

Q: What do you think about in terms of the energy lending outlook with the new administration? A: Stacy Kymes noted it's too soon to know the exact impact, but expects more federal lands to open for drilling and a better permitting process. However, borrower behavior will be disciplined, focusing on capital investment returns.

Q: I want to ask more about the guidance for net interest income in 2025. Can you give us any kind of launch point or guidance for the first quarter? A: Stacy Kymes explained that core margin ex-trading will continue to be supported by fixed rate asset repricing and loan and deposit growth. Trading portfolio yields should increase, contributing to net interest income growth, with total revenue expected to grow mid to upper single digits.

Q: Can you talk about the net interest income outlook and the drivers to the upper end of the range versus the lower end? A: Stacy Kymes highlighted that securities repricing and fixed rate repricing are durable throughout the year. The low loan-to-deposit ratio provides flexibility in managing deposit pricing, allowing for potential yield side aggressiveness if desired.

Q: What drove the deposit growth in the fourth quarter, and does it impact your deposit strategy for 2025? A: Stacy Kymes stated that growth was across all three lines of business, with commercial contributing more. The strategy remains unchanged, with expectations to continue deposit growth, albeit not at the high rate achieved this year.

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