Business Context and Reporting Period
Company: BOK Financial Corp (BOKF)
Filing Type: Form 10-Q
Reporting Period: Quarter ended March 31, 2026
Business Overview: BOK Financial operates three principal segments: Commercial Banking, Consumer Banking, and Wealth Management. The company provides lending, treasury services, wealth management, and customer risk management products, with a significant focus on the energy sector and commercial real estate within its geographic footprint (Oklahoma, Texas, Colorado, Arizona, New Mexico, Kansas, Missouri, and Arkansas).
Key Financial Metrics
| Metric | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Net Income | $155.8 million | $177.3 million | $119.8 million |
| Diluted EPS | $2.58 | $2.89 | $1.86 |
| Net Interest Income | $342.6 million | $345.3 million | $316.3 million |
| Net Interest Margin (NIM) | 2.90% | 2.98% | 2.78% |
| Core NIM (excl. trading) | 3.15% | 3.22% | 3.05% |
| Fees & Commissions Revenue | $209.8 million | $214.9 million | $184.1 million |
| Total Operating Expense | $354.2 million | $361.1 million | $347.5 million |
| Efficiency Ratio | 63.21% | 60.71% | 68.31% |
| Provision for Credit Losses | $0 | $0 | $0 |
| Net Charge-offs | $1.9 million (0.03% annualized) | $1.4 million (0.02% annualized) | $1.1 million (0.02% annualized) |
| Total Loans | $26.2 billion | $25.7 billion | $23.7 billion |
| Total Deposits | $38.7 billion | $39.4 billion | $38.3 billion |
| Loan-to-Deposit Ratio | 68% | 65% | 62% |
| Assets Under Management | $123.6 billion | $126.6 billion | $114.0 billion |
| Common Equity Tier 1 Ratio | 12.61% | 12.90% | 13.31% |
| Tangible Common Equity Ratio | 9.29% | 9.46% | 9.48% |
Material Changes vs. Prior Periods
- Quarter-over-Quarter (Q1 2026 vs. Q4 2025):
- Net Income: Decreased $21.5 million (12%) primarily due to a $23.5 million pre-tax gain on the sale of a merchant banking investment in Q4 2025 and lower investment banking revenue.
- Net Interest Income: Decreased $2.7 million. NIM compressed 8 basis points to 2.90% due to lower deposit spreads and a shift away from demand deposits, partially offset by loan growth.
- Operating Expenses: Decreased $6.9 million, driven by lower incentive compensation and professional fees. Excluding the Q4 2025 FDIC special assessment benefit, expenses decreased $16.4 million.
- Deposits: Decreased $758 million to $38.7 billion, with a $1.0 billion decrease in average deposits.
- Loans: Increased $536 million to $26.2 billion, led by growth in general business, energy, and multifamily commercial real estate.
- Year-over-Year (Q1 2026 vs. Q1 2025):
- Net Income: Increased $36.0 million (30%) to $155.8 million.
- Net Interest Income: Increased $16.5 million, driven by changes in interest rates and increased earning assets.
- Fees & Commissions: Increased $25.7 million, with growth in brokerage/trading, fiduciary, and transaction card revenue.
- Operating Expenses: Increased $6.6 million, primarily due to higher data processing and mortgage banking costs.
Guidance, Outlook, and Risks
- Management Commentary:
- Capital Management: The company maintains a strong capital position. No shares were repurchased in Q1 2026; the company views buybacks opportunistically. A quarterly dividend of $0.63 per share was declared.
- Interest Rate Environment: The balance sheet is asset-sensitive. Management utilizes fixed-rate residential mortgage-backed securities and derivatives to manage interest rate risk. A 200 basis point parallel increase in rates is projected to decrease net interest income by approximately 1.86% over the next 12 months.
- Energy Sector: Higher projected oil prices provided a favorable impact on the energy loan portfolio, offsetting loan growth and slight downward revisions to economic forecasts.
- Risks and Contingencies:
- Market Risk: Exposure to interest rate changes, commodity prices (energy), and mortgage servicing rights (MSR) valuation. MSR fair value is sensitive to primary mortgage rates and prepayment speeds.
- Credit Risk: Concentration in energy loans ($3.0 billion) and commercial real estate ($5.9 billion). Nonperforming assets decreased to $52 million (excluding U.S. government guaranteed assets).
- Liquidity: Deposits decreased, leading to a higher loan-to-deposit ratio (68%). The company relies on wholesale borrowings and has significant secured borrowing capacity ($25.1 billion estimated).
- Legal: Ongoing litigation related to a 2015 municipal bond trustee matter; management believes no loss is probable. Visa exchange offer activities are ongoing.
Investor Verification Checklist
- Non-GAAP Reconciliations: Verify the adjustments made to Net Income and EPS to exclude the Q4 2025 merchant banking gain and FDIC benefit to understand core earnings trends.
- Deposit Composition: Analyze the shift from demand deposits to interest-bearing deposits and the reliance on wholesale borrowings to fund loan growth.
- Energy Loan Exposure: Review the specific risk grading and collateral coverage for the $3.0 billion energy loan portfolio given the volatility in oil prices.
- MSR Valuation: Assess the sensitivity of Mortgage Servicing Rights to interest rate changes and the effectiveness of economic hedges.
- Capital Ratios: Confirm that the decline in Common Equity Tier 1 (12.61%) and Tangible Common Equity (9.29%) ratios remains well above regulatory minimums and conservation buffers.
- Share Repurchase Program: Note that while no shares were bought in Q1 2026, $2.0 million of the $5.0 million authorized program remains available.