BOK FINANCIAL CORP BOKF

BOK Financial capitalized on market disruption^🌐s by adding over 25 new teammates, with more than 20 in Texas, and others in Colorado and Arizona. These additions, primarily revenue producers across commercial, corporate, and small business segments, are expected to drive future growth, building on a long-term strategy of investing in top talent and deepening customer relationships. Management views talent acquisition as an ongoing 'line of business' to support organic growth across all key markets.

The company achieved record quarterly loan growth of $896 million, a 3.4% sequential increase and 11.5% year-over-year, driven by broad-based expansion across business lines and geographies. Core C&I loans grew 3.9% sequentially and 11.1% year-over-year, contributing nearly 70% of the year-over-year growth. Healthcare loans increased 3.2% and Energy loans grew 1.6%. Mortgage finance also contributed significantly, with outstanding balances reaching $452 million and active warehouse facilities at $870 million, achieving its first month above breakeven in June.

Fee-based businesses were solid contributors, with fiduciary and asset management revenue reaching a record high, growing $4.5 million sequentially, supported by higher trust fees and seasonal tax preparation fees. Assets Under Management and Administration (AUMA) grew $5.7 billion to $129.3 billion, reflecting increased market valuations and customer expansion, and showing an annual growth rate of nearly 10%. While total fee income declined $7.8 million sequentially, primarily due to a $9.7 million decrease in trading revenue, syndication revenue grew $3 million, marking a record second quarter for the business.

Net interest income increased $9.3 million, and reported net interest margin grew 1 basis point. Core NII increased $6.5 million, though core NIM decreased 2 basis points, primarily due to a temporary 3 basis point negative impact from cash margin posted for energy derivative customers as oil prices moved higher. Management anticipates margin expansion in the second half of the year driven by positive securities portfolio performance, fixed-rate asset repricing, the return of the derivative margin impact, and expected DDA growth.

Credit quality remains excellent, with nonperforming assets consistent at 20 basis points of period-end loans and net charge-offs of only $500,000 (3 basis points over the last 12 months). The allowance for credit losses stands at a healthy $323 million, or 1.1% of outstanding loans, with no provision required this quarter due to offsetting improvements in economic forecasts and loan growth. Management noted that credit metrics are better than CECL day 1 levels and the ACL ratio could continue to fall in a stable economic environment.

Capital levels are very strong, with tangible common equity at 9.6% and CET1 at 12.9%. The company recognized a pretax gain of $30.9 million from the exchange of VISA B shares, which further strengthened its capital position. Management emphasized a patient and opportunistic approach to capital deployment, seeking long-term value, and noted that their strong capital position allows for thoughtful deployment.