BOK Financial Corporation (BOKF) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Overall, the earnings call presents a positive outlook with strong financial metrics, optimistic guidance, and strategic growth plans. Despite some competitive pressures, the company anticipates robust loan and deposit growth, efficiency improvements, and strong credit quality. The Q&A session revealed confidence in fee income and trading revenue growth, supported by market dynamics. The cautious approach to capital deployment and conservative fee income guidance are prudent, but do not overshadow the positive sentiment. The lack of specific market cap data suggests a moderate reaction, leading to a positive stock price movement prediction.
Key Financial Performance
Earnings for Q4 2025 $177.3 million or EPS of $2.89 per diluted share, marking a record high earnings per share for the quarter.
Full Year 2025 Earnings $578 million or $9.17 per diluted share, marking a record high earnings per share for the year.
Loan Growth for 2025 Expanded loan balances by more than $1.5 billion or 6.4%. Growth was broad-based across geography and lending segments. After an economic pause in Q1, loans grew at an annualized rate of 11% over the last 9 months of the year.
Net Interest Income and Margin Net interest income grew, and net interest margin expanded in every quarter of 2025. Q4 net interest margin increased by 7 basis points.
Fee Income for 2025 $801 million, representing 38% of total revenue. Fee income increased 5.1% sequentially in Q4.
Allowance for Credit Losses Maintained a combined allowance of 1.28% of outstanding loans. Annualized net charge-off rate for the year was only 3 basis points.
Loan Growth in Q4 2025 Outstanding loan balances grew $786 million or 3.2% sequentially. Core C&I portfolio, healthcare, and energy portfolios expanded 5.3% in total. Texas contributed $561 million of total Q4 growth.
Healthcare Loans in Q4 2025 Increased 3.3%, driven by strong origination activity and funding of prior commitments.
Energy Loans in Q4 2025 Grew more than $200 million, driven by higher utilization rates and solid new loan origination. Payoff activity moderated to normal levels.
Commercial Real Estate Loans Decreased 1.4% quarter-over-quarter but increased 12.1% year-over-year. The quarterly decline was due to normal refinancing into the permanent market.
Nonperforming Assets Decreased $847,000 to $66 million. Nonperforming assets to period-end loans and repossessed assets decreased 1 basis point to 26 basis points.
Net Charge-Offs in Q4 2025 $1.4 million, averaging 3 basis points over the last 12 months. No provision was required in Q4 as loan growth was balanced by an improved economic forecast.
Fee Income in Q4 2025 Increased $10.4 million sequentially, contributing $214.9 million to revenue. Fiduciary and asset management revenue grew $4.5 million, and transaction card revenue increased $2.1 million.
AUMA in Q4 2025 Grew $3.9 billion to $126.6 billion, setting a new record high.
Net Interest Income in Q4 2025 Increased $7.6 million, with core net interest income up $8.7 million. Core margin grew 6 basis points.
Total Expenses in Q4 2025 Decreased $8.7 million. Personnel expenses were down $3.6 million, and non-personnel expenses decreased $5.1 million.
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Operating Highlights
Loan Growth: Achieved solid loan growth, expanding loan balances by more than $1.5 billion or 6.4% for the year. Growth was broad-based across geography and lending segments, with Texas contributing $561 million in Q4 alone.
Net Interest Income: Net interest income grew consistently, with net interest margin expanding in every quarter of 2025. Q4 net interest margin increased by 7 basis points.
Fee Income: Fee income contributed $801 million to revenue, representing 38% of total revenue. Fiduciary and asset management and transaction card businesses posted record revenue for both the quarter and the year.
Credit Quality: Maintained a combined allowance of 1.28% of outstanding loans with an annualized net charge-off rate of only 3 basis points. Nonperforming assets decreased to $66 million.
Capital Levels: Tangible common equity stood at 9.5% and CET1 at 12.9%. Repurchased over 2.6 million shares at an average price of $107.99 per share in Q4.
Expense Management: Total expenses decreased by $8.7 million in Q4, driven by lower personnel and non-personnel expenses. FDIC adjustments contributed a $9.5 million benefit.
2026 Outlook: Expecting upper single-digit loan growth, net interest income of $1.44 billion to $1.48 billion, and fee income in the $800 million to $825 million range. Expense growth anticipated in the low single digits, with an efficiency ratio of 63%-64%.
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Risk or Challenges
Loan Portfolio Growth: While the company achieved solid loan growth, there is a risk of credit normalization occurring in the long term, which could impact credit quality and financial performance.
Commercial Real Estate Loans: The commercial real estate business experienced a small quarter-over-quarter decline of 1.4%, driven by refinancing into the permanent market. This could indicate potential challenges in sustaining growth in this segment.
Energy Loans: Higher-than-normal payoff activity earlier in the year due to industry consolidation could pose risks if such trends re-emerge, potentially impacting loan growth in this segment.
Provision Expense: The 2026 provision expense guidance allows for potential credit normalization later in the year, which could increase costs and impact profitability.
Net Interest Margin: The net interest margin benefited from temporary factors such as SOFR spreads and wholesale deposit shifts. A return to normal funding market spreads could reduce this benefit, impacting future margins.
Regulatory Costs: The FDIC's updated estimate of the special assessment provided a one-time benefit, but future regulatory costs could increase, impacting non-personnel expenses.
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Guidance & Outlook
Loan Growth: End-of-period loan growth is expected to be in the upper single digits for 2026, reflecting continued growth in the existing portfolio and contributions from the new mortgage finance segment.
Net Interest Income: Net interest income is projected to range between $1.44 billion and $1.48 billion, assuming two interest rate cuts in the latter half of 2026 and a slightly steeper yield curve.
Fee Income: Fee income is anticipated to be between $800 million and $825 million, driven by mid-single-digit growth in fee-based businesses and a steeper yield curve shifting some trading revenue to net interest income.
Total Revenue: Total revenue is expected to grow in the mid-single-digit range, with a baseline of $2.18 billion in 2025.
Expense Growth: Expenses are projected to grow in the low single digits, with a full-year average efficiency ratio of 63% to 64%, improving as revenue grows throughout the year.
Provision Expense: Provision expense is expected to range between $25 million and $45 million, allowing for potential credit normalization later in the year.
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Shareholder Return Plan
Share Repurchase: During the quarter, the company repurchased over 2.6 million shares at an average price of $107.99 per share.
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Key Q&A
Q:What are the drivers of the upper single-digit loan growth, considering the moderation in consumer loan growth and decline in commercial real estate?
A:The loan growth has been diverse by geography and lending type. Significant growth in the fourth quarter included $100 million driven by the mortgage finance business. Energy was a headwind earlier in the year but became a tailwind in the fourth quarter. Commercial real estate was a headwind in the fourth quarter but grew solidly double digits for the year. Investments in the C&I world over the last three years have also contributed to the growth.
Q:How is the company thinking about future share buybacks and targeted CET1 ratio?
A:The company does not have a targeted CET1 ratio. Share buybacks are opportunistic and shareholder value-oriented, as demonstrated by the Q4 activity connected to sub-debt issuance.
Q:Did the company conduct an ASR in November, and what explains the change in short interest during that period?
A:Yes, a portion of the Q4 share buyback was related to an ASR conducted in early November. The change in short interest is not directly addressed.
Q:Can you discuss the competition for deposits and expectations for deposit growth and mix?
A:The deposit environment is competitive but not irrational. A portion of Q4 growth was due to wholesale deposits being cheaper than normal secured wholesale borrowing. Loan growth is expected to exceed deposit growth in 2026, with deposit betas performing well in the mid-60s for deposits and upper 70s for interest-bearing liabilities.
Q:What are the expectations for fee income growth and trading revenue?
A:Fee income growth is expected to be mid-single digits, including trading revenue. Trading revenue, which includes NII and fees, is expected to grow mid-single digits, with potential for higher growth depending on market opportunities.
Q:What are the drivers of the strong efficiency outlook with a guide of 63%-64%?
A:The efficiency outlook is driven by continued revenue momentum, reductions in personnel and professional fees expenses, and long-term investments in areas like San Antonio and mortgage finance. These investments are now beginning to show returns.
Q:What is the expected contribution of the mortgage finance business to the balance sheet in 2026?
A:The mortgage finance business is expected to reach $1 billion in commitments by the end of 2026, with about half of that funded.
Q:What is the outlook for the core margin and repricing of fixed-rate loans and securities in 2026?
A:The core margin is expected to expand in 2026. Approximately $700 million of securities and $200 million of fixed-rate loans are expected to reprice each quarter, with rate step-ups of 60-75 basis points for securities and over 100 basis points for loans.
Q:What is the guidance for loan growth in 2026, and are there any potential headwinds?
A:Loan growth is guided to upper single digits (7%-9%). While the company is confident in delivering this growth, unexpected headwinds in specific areas could arise.
Q:What is the credit outlook, and what factors could impact credit quality?
A:Credit quality is expected to remain strong in the short term. The biggest drivers for provision levels will be loan growth and economic outlook. The company does not foresee any specific areas of concern but acknowledges that credit levels may normalize over time.
Q:How will the mortgage finance business be funded as it grows?
A:The mortgage finance business will be funded through a mix of wholesale and deposits, with a focus on the lowest cost and most sensible funding mix.
Q:What market dynamics could support stronger growth in the trading business?
A:Declining interest rates could increase mortgage origination activity and refinancing in the municipal space, benefiting the trading business. Additionally, as securities portfolios approach par, there may be more opportunities for trading activity.
Q:What is the outlook for expenses in 2026, and are there any non-core items affecting the starting point?
A:Expenses are expected to show some reduction in personnel and professional fees from Q4 to Q1. Non-core period costs in Q3 and Q4 were small and not material to the 2026 outlook.
Q:Will the mortgage finance business experience seasonal growth patterns in 2026?
A:Given the business is starting from a low base, growth in 2026 is expected to be strong and largely linear, without discernible seasonal patterns.
Q:Are there plans for incremental hires in markets with significant M&A activity?
A:Yes, the company plans to be aggressive in talent acquisition in markets with significant M&A activity to capitalize on market dislocation.
Q:What is the guidance for NII growth in 2026, and how does it relate to earning asset growth?
A:NII growth is guided by a blend of stable securities portfolio and high single-digit loan growth, resulting in lower overall earning asset growth. Deposits are expected to grow to support the margin, with loan growth outpacing deposit growth.
Q:Why is the fee income guidance for 2026 conservative compared to recent growth?
A:The guidance accounts for a shift from fee income to NII within trading due to the curve slope. Additionally, a $23.5 million one-time gain in 2025 skews the comparison.
Q:What is the outlook for capital deployment in 2026?
A:The company prioritizes loan growth, opportunistic M&A, and share repurchases for capital deployment. There are no immediate M&A opportunities, and share repurchases are expected to slow in 2026.
Q:Were there any unusual factors affecting loan yields in Q4, and what are the expectations for loan betas in 2026?
A:Loan yields in Q4 benefited slightly from quirks in SOFR rates. Loan betas are expected to align with the margin guidance for 2026.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the change in short interest during the ASR period and did not provide specific details on the movement from fee income to NII within trading guidance.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUMA trajectory
Bank Index
CI loan
Core CI
Energy loan
Financial Full
Full Conference
Full result
Healthcare production
Index shareholder
Investment banking
KBW Regional
Regional Bank
Scott Executive
Slide couple
Slide fee
Texas interest
activity funding
activity part
activity payoff
agency mortgage
approach track
asset customer
asset transaction
attention result
balance core
core CI
geography
industry
loan balance
loan origination
loan result
portfolio loan
record high
segment
transaction card
BOKF Transcript
BOK Financial Corporation (BOKF) Q4 2025 Earnings Call Transcript
Positive1-20
Overall, the earnings call presents a positive outlook with strong financial metrics, optimistic guidance, and strategic growth plans. Despite some competitive pressures, the company anticipates robust loan and deposit growth, efficiency improvements, and strong credit quality. The Q&A session revealed confidence in fee income and trading revenue growth, supported by market dynamics. The cautious approach to capital deployment and conservative fee income guidance are prudent, but do not overshadow the positive sentiment. The lack of specific market cap data suggests a moderate reaction, leading to a positive stock price movement prediction.
BOK Financial Corporation (BOKF) Q3 2025 Earnings Call Transcript
Positive10-21
The earnings call reveals strong financial performance with record high AUMA, increased net interest margin, and robust loan growth. The company is optimistic about future growth, supported by strong pipelines and strategic market opportunities. Despite some uncertainties in guidance and competitive forces, credit quality remains strong, and there is a focus on organic growth and share repurchases. The Q&A section reinforces the positive outlook with expectations of sustained growth and stable competitive environments. Overall, the sentiment is positive, indicating a likely stock price increase in the short term.
BOK Financial Corporation (BOKF) Q2 2025 Earnings Conference Call Transcript
Positive7-23
The earnings call indicates strong financial performance and optimistic guidance, with expectations of loan growth, stable credit quality, and a successful mortgage warehouse launch. The Q&A reveals positive sentiment towards margin expansion, loan growth, and fee income. Despite increased expenses, the strategic initiatives and strong market positioning in key regions are likely to drive stock price upwards in the short term.
BOK Financial Corporation (BOKF) Q1 2025 Earnings Call Transcript
Unknown4-22
The earnings call presents mixed signals: strong financial metrics with record assets under management and improved CET1, but challenges like decreased trading revenue and energy loan contraction persist. The Q&A section highlights management's confidence in future growth and loan recovery, yet uncertainties in borrower behavior and unclear guidance on mortgage finance create ambiguity. Despite no share repurchase announcement, expected deposit growth and operational flexibility provide stability. Overall, the neutral sentiment reflects balanced positive and negative factors, suggesting limited stock price movement in the short term.
BOKF Slides
BOKF Report
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