On October 25, 2023, BOK Financial Corp (BOKF, Financial) released its earnings report for the third quarter of 2023. Despite a decrease from the previous quarter, the company reported a solid performance, driven by its diverse business model and a focus on growth opportunities.
Financial Performance
For the third quarter of 2023, BOKF reported a net income of $134.5 million or $2.04 per diluted share, compared to $151.3 million or $2.27 per diluted share for the second quarter of 2023. Net interest revenue totaled $300.9 million, a decrease of $21.4 million compared to the prior quarter. The net interest margin was 2.69 percent compared to 3.00 percent in the previous quarter.
Revenue and Expenses
Fees and commissions revenue decreased by $2.6 million to $197.9 million. Operating expense increased by $5.6 million to $324.3 million, primarily due to higher occupancy and equipment costs and other expenses. Other gains and losses, net decreased by $11.1 million to $1.5 million.
Loan and Deposit Growth
Period-end loans grew by $486 million to $23.7 billion at the end of September 2023, mostly driven by growth in commercial loans and commercial real estate loans secured by multifamily properties. Period-end deposits increased by $358 million to $33.7 billion while average deposits increased by $918 million to $33.3 billion.
Capital and Liquidity
The company's tangible common equity ratio, a non-GAAP measure, was 7.74 percent at the end of September 2023. The company's common equity Tier 1 capital ratio was 12.06 percent at the same date. The company repurchased 700,500 shares of common stock at an average price paid of $84.17 a share in the third quarter of 2023.
CEO Commentary
We recognized another solid quarter of earnings driven by our diverse business model, which prudently balances interest revenue with non-interest revenues and allows us to perform well in a multitude of business climates. Non-interest revenues now represent 40% of our total revenues. In addition, we continue to focus on opportunities for growth given the economic vitality of our core geographic footprint as we take advantage of our capital and liquidity strengths. We have increased loans almost 9% over the previous year and our core commercial and industrial loans are up 8% from last year. We’re focused on investing in growth initiatives like our San Antonio expansion, which will drive long-term shareholder value. We have consistently proven that our business diversification coupled with our outstanding team outperforms against strong headwinds." - Stacy Kymes, president and chief executive officer
Despite the challenges, BOKF continues to focus on growth initiatives and maintains a strong financial position. The company's diverse business model and prudent balance of interest and non-interest revenues have enabled it to perform well in various business climates.
