Bok Financial Corp (BOKF) Tops Q1 EPS by 9c

Bok Financial Corp (NASDAQ: BOKF) reported Q1 EPS of $1.61, $0.09 better than the analyst estimate of $1.52.

First Quarter 2018 Highlights

• Net interest revenue totaled $219.7 million for the first quarter of 2018, an increase of $2.9 million over the fourth quarter of 2017. Net interest margin increased to 2.99 percent for the first quarter of 2018 from 2.97 percent for the fourth quarter of 2017. Average earning assets grew by $120 million over the prior quarter.
• Fees and commissions revenue totaled $159.0 million for the first quarter of 2018, largely unchanged compared to the fourth quarter of 2017 on a comparable presentation basis. Adoption of the new revenue recognition accounting standard in the first quarter of 2018 resulted in $9.5 million of interchange fees we pay to issuing banks being netted against transaction card revenue. Previously these costs were included in data processing and communications expense. Increased mortgage banking and transaction card revenuewere offset by decreased brokerage and trading revenue.
• Operating expense was $244.4 million for the first quarter of 2018, a $10.1 million decrease compared to the fourth quarter of 2017 on a comparable presentation basis. Personnel expense decreased $5.4 million, primarily due to decreased incentive compensation expense. Non-personnel expense decreased $4.7 million. Lower professional fees and services expense and mortgage banking expense were partially offset by a write-down of certain repossessed oil and gas properties.
• Income tax expense was $30.9 million or 22.7 percent of net income before taxes for the first quarter of 2018 compared to $54.3 million or 42.9 percent for the fourth quarter of 2017. Beginning January 1, 2018, the Tax Cuts and Jobs Act decreased the corporate income tax rate from 35% to 21%. Accounting for the Act required us to revalue our deferred tax assets and liabilities in 2017. We anticipate our effective tax rate to be between 22 percent and 23 percent for 2018.
• The Company recorded a $5.0 million negative provision for credit losses in the first quarter of 2018, due to improved credit metric trends. A $7.0 million negative provision for credit losses was recorded in the fourth quarter of 2017. The company had net charge-offs of $1.3 million or 0.03 percent of average loans on an annualized basis in the first quarter of 2018, compared to net charge-offs of $11.7 million or 0.27 percent of average loans on an annualized basis for the fourth quarter of 2017.
• The combined allowance for credit losses totaled $228 million or 1.32 percent of outstanding loans at March 31, 2018, compared to $234 million or 1.37 percent of outstanding loans at December 31, 2017.
• Nonperforming assets that are not guaranteed by U.S. government agencies totaled $195 million or 1.13 percent of outstanding loans and repossessed assets at March 31, 2018 and $207 million or 1.22 percent of outstanding loans and repossessed assets at December 31, 2017. In addition, potential problem loans decreased $19 million to $222 million at March 31, 2018.
• Average loan balances grew by $80 million over the previous quarter, primarily due to growth in commercial loan balances. Period-end outstanding loan balances totaled $17.3 billion at March 31, 2018, a $184 million increase over December 31, 2017.
• Average deposits were largely unchanged compared to the previous quarter. Average demand deposit balances decreased by $266 million, largely offset by a $202 million increase in interest-bearing transaction deposit balances. Period-end deposits were $22.2 billion at March 31, 2018, a $144 million increase over December 31, 2017.
• The common equity Tier 1 capital ratio at March 31, 2018 was 12.06 percent. Other regulatory capital ratios were Tier 1 capital ratio, 12.06 percent, total capital ratio, 13.49 percent, and leverage ratio, 9.40 percent. At December 31, 2017, the common equity Tier 1 capital ratio was 12.05 percent, the Tier 1 capital ratio was 12.05 percent, total capital ratio was 13.54 percent, and leverage ratio was 9.31 percent.
• The company paid a regular cash dividend of $29.3 million or $0.45 per common share during the first quarter of 2018. On April 24, 2018, the board of directors approved a quarterly cash dividend of $0.45 per common share payable on or about May 25, 2018 to shareholders of record as of May 11, 2018.
• The company repurchased 82,583 common shares at an average price of $91.83 per share during the first quarter of 2018. The company repurchased 80,000 common shares at an average price of $92.54 per share during the fourth quarter of 2017.

For earnings history and earnings-related data on Bok Financial Corp (BOKF) click here.

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