Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to BOK Financial Corporation Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to Steven Nell, Chief Financial Officer for BOK Financial Corporation. Thank you.

begin. may You

Steven Nell

and thanks cover Kymes, and Vice us. our provide of the loan Today, for Grauer, regarding and Good Vice details fee-based Executive provide for results. opening Stacy President portfolio our cover will Banking, Management, Executive credit comments. CEO, metrics; Regional of our the our Grunst, presentation key Scott the financial will morning refer regarding forward Wealth will named joining statements make X related our CFO, press Marc guidance. will And President will you our Slide Maun, PDF on at we quarter performance fourth during recently provide available our slide incoming and Marty to are call. bokf.com. the on forward-looking metrics. release disclaimers website I We

call I'll to now Stacy the over turn Kymes.

Stacy Kymes

morning. joining Good quarter BOK and Financial's full-year discuss fourth to financial results. for XXXX's us Thanks

income diluted the million continued we on quarter $XXX the earnings developing or Slide have of results was strong momentum been per net throughout $X.XX fourth build The on XXXX. fourth X, to Starting quarter share.

highest core was XX%. together with pre-provision X core quarters revenue with history. Through in the of the now fourth straight quarter This solid growth, loan put loan our growth quarter, annualized we've net

XXXXs. Our the for combined late fee markets business worst the has remained for despite year, income the strong since the quarter and equity fixed and

the asset-sensitive balance increase growth net in revenue interest rise million the basis a interest point and to during of continued sheet As margin. and linked-quarter our rates earning quarter, a net short-term assets the in interest in $XX drove increase XX combination

origination quarter changes as downturn. net full-quarter of to We quarter experience customer program, to our increase implementation effects mortgage diverse of an did market well linked fees despite stable the announced linked goes impact continued the as Credit in our charge-offs. overdraft of previously the fee base, also with

during growth remained economic However, unfunded in loss good. The less our the did slightly add to strong our with the factors economic credit recognition In commitments key loans outlook the unsustainably asset high, quarter, remain and reserve. of in favorable quarter. this quality we uncertainty trends

Period-end loan or X.X% with $XXX commitments remained and historical C&I real million Slide and estate. linked million balances billion core increased loan Unfunded capacity for have exists growth commercial to across rates balances. spread linked [ph] below grew months. Turning XX X. in $X.X growth increased Utilization the over outstanding quarter norms, so slightly quarter, continued last $XXX

to compared to $X.X and consistent We These pre-pandemic with to continue trends. volumes decrease attrition quarter, deposit response to the of slow high of in this Federal billion Reserve or to efforts both X% the in industry remain move trends declines levels. Average rates experience interest-bearing inflation with continued were a short-term higher did balances. noninterest-bearing

were grew administration The or or year. total, management under on and the quarter Assets $X.X X.X% $X.X impact which market sales driving year billion compared approximately with the performance. linked X/X down or comprise X.X% new of offset partially was this billion last to equity

Maun Marc results provide the more and credit in Q&A loan our I'll before metrics on now but review will perspective starting the additional the session portfolio detail.

call I'll the turn to Marc. over

Marc Maun

Thanks, Stacy.

in This the XXXX. real balances experiencing Unfunded million X. million with were loans X.X% C&I or linked portfolio sectors. growth C&I linked our quarter. and up estate or XX% significant to loan linked increased our XX.X% increased increased Turning to or billion, effectively level billion or X.X% paydown for increased quarter. loans for $X.X Slide across Period-end and Commercial $XX.X loans year. year, all core have Total increased quarter $XXX in have X.X% the $XXX XXXX those returns linked million after X% quarter commitments $XXX activity

estate properties capital linked by total commitments residential Tier The CRE commitments. disciplined loans X commercial real quarter. XXX% our secured reserves allocating CRE take from We and facilities. lending driven increased increase was multifamily X.X% and by to of primarily approach Unfunded annual a industrial to

We balances to construction up. in are fund as range loans presently at grow the CRE expect but outstanding of XXXX that upper limit commitment do

but quarter, which XX.X% growth. Health year-over-year. for linked this linked capacity for resulting driven care average or up growth. primarily balances rate balances $XX sheet by quarter utilization increased senior slightly will increased million increased $XXX or increased expect X.X% continued million [ph] produce Energy X.X% $XX commitments XX% million increased and have or care quarter, Health in sector. Unfunded our creating approximately linked housing increased X.X% balance year, the additional million XX.X% quarter balance an unfunded have $XXX more commitments of XX%, we or

business businesses, educational specialty have increasing quarter, recorded not-for-profit increased as sector general quarter. and Combined including number X.X% also of increased, business operations, a loans loans with $XXX million Unfunded increased American, or of and commitments with categories contractors. balances and services lowering linked tribal in loans tribal organizations, retail Service consist are the services linked business state foundations, mainly or trade our Loans combined Loans of and $XXX governments wholesale large variety casino loans sector rate. general our a strong up business and slightly XX.X% X.X% in quarter, from million utilization million linked the to services as local XX.X% Native sectors. and or quarter. year-over-year. category well a $XXX in General balances services general

below it to pre-COVID without well increase Utilization we any loan outstanding acquisition. remain to so new levels, balances run predicated positioned on customer being rates continue

annual PPP XX%, dollar Over our loans in the loans. $X.X excluding core history, the and billion acquisitions months, last XX increase or have largest grown

experienced customers pace, expect as to don't continue this the past quarters believe X and growth utilizations. will their that we've we over continue enter loan at the we XXXX we line momentum Although increase

loans consideration see this quarter, portfolio. U.S. good million $XX that Nonaccrual exceptionally those loan commitments unfunded $XX balances assets, quarter. million $XX added quality credit expected credit our repossessed outstanding for provision the assets we $X of In loan and growth Turning decreased to decreased million and this to million Slide government losses. in [ph]. fell strong excluding to guaranteed you continues X, across can Nonperforming be by agencies,

The level our less high scenarios, forecast slightly of of forecast and downside weighting to and linked were across quarter reasonable and with key the our remained unchanged economic supportable XX%. all probability economic favorable economic growth outlook factors at uncertainty

ratio we Given in allocated should to than we our past less today, solid history an and during a of outperformance credit position economic well commercial of slowdown a estate cycles, positioned, ahead. the capital substantially believe are credit quarters that's materialize our real peers

$XX.X quarter, fourth million We the realized a related all of essentially during to net single charge-offs credit.

our points to XX far averaged range below charge-offs basis of which is historic basis loss net year, full the For XX points. XX

or we X.XX% expect forward, quarter to combined outstanding Looking credit allowance $XXX The continue be net end. charge-offs was at loans losses of low. to for million

continued maintain -- We continue ratio as as conditions to Both well going goal to to as as reducing growth provisions uncertainty support to expect their market migrate or slightly credit forward. of this loan pursues these conditions the we of as due strong upward expect economic inflation. we Fed

Now, I'll Scott. turn the call over to

Scott Grauer

Marc. Thanks,

commissions unchanged quarter. to fourth Turning were XX. and Slide quarter, Total relatively $XXX million from last the for fees

quarter we banking record-high activities as activities. results However, hedging linked for conditions advantage as as investment and commodity took favorable $X and million the of bank-wide our Trading well quarter market our volatility. market increased fees third included increased

derivatives. quarter $X.X and syndication customer primarily of $X.X hedging fees high, offset record wealth banking a of with million investment activities fell investment other rate investment generated from from or million loan million declines segment. compared for in last quarter's million linked from XXXX. Commercial fees, record declined commercial last activities in hedging and from in increase activities million high. fee increased income by energy XX% banking million $X.X both interest commodity linked our to combination The decrease banking our banking an Bank-wide $X.X $XX Our investment fees quarter, and year, and segments municipal the $XX our quarter's

$XX and the fourth management for fees were quarter, relatively Fiduciary quarter. linked flat asset million

these fees. to the due as driven fund to the waivers increased increase increases or in as For primarily fee $XX market-driven interest our year, reduced oil short-term well by rates and gas fees million XX%,

finished year across categories. management at billion, or under of with or administration all $X.X increase assets Our growth $XX.X billion the X.X% quarter, linked an

with relatively quarter, XX% or and alternatives. Our was cash under income, X% asset equities, this administration XX% management mix for assets fixed XX% unchanged

to in due changes increased also down linked decreased charges decreased quarter, down this related million quarter, combined decline production margins. quarter with million $X.X million customers. charges service with the higher earnings servicing last fees than primarily the increased narrowing was fourth as during a banking $X.X $XX the for XX% million implemented quarter are Commercial we quarter and slightly $XXX production quarter, this Mortgage revenues year. slightly volumes service we to slightly the Mortgage Deposit overdraft for program. revenue our our rate to credit

add Over balances strategically annual will approximately the unpaid billion of past XX months, servicing $XX million of acquired revenue. servicing we principal of $X that

Steven I'll to our margin quarter. items net now Steven? and dynamics sheet the turn the important highlight for to balance over the call interest

Steven Nell

Scott. Thanks,

quarter to XX, million Turning was million, a $XXX linked interest revenue increase Slide net $XX quarter. fourth

million points with the increase revenue. linked margin bringing offset to increased securities quarter compared for combined on $X.X partially loan deposits as in increased asset-sensitive million. our but available-for-sale interest portfolio Average the increased increases year. cash pivot XX% rate our strong $XXX beta interest-bearing average our portfolio fell that increased $XXX cash expansion net from the growth securities rapid to linked interest resulted This neutral total of Average in rates, margin X.XX%. basis more we last slightly interest quarter. X.XX% was expansion million the The The towards rate our quarter and $XXX to quarter, by effective portfolio back XX million, interest loans average position, and which dilutes to net this increased while a equivalents position. earning $XXX assets this quarter The deposit billion

that XX, remains our position you Slide can On very see liquidity strong.

loan-to-deposit year-end $XXX on-balance XX.X% XX.X% this Total ratio customer XX. to of demand. from increasing although the current loan at balances XXXX, this sufficient future below well decreased providing quarter Our September liquidity loan-to-deposit sheet and pre-pandemic increased increased billion ratio million quarter, remains at to level loan our $X.X XX.X% deposits meet

with remains well, Tier regulatory of as common a above ratio Our equity strong XX.X%, capital well thresholds. X position

It that such ratio growth bank strong our available-for-sale at loan Both portfolio, holding and per With active the were market. common levels, company X our open strong equity even our share all share shares XXX,XXX agencies. from remains investment-grade tangible price losses hold rating of with strong we in major unrealized repurchasing an with notable average again once securities is material the and repurchase, X.XX%. in at capital opportunistically the ratings $XXX.XX

shares to in next the expect quarters. active repurchasing X over be We

is incentive. personnel increased which million as expenses personnel the expense employee activity from increased directly by from quarter Turning linked cash-based to from Slide to and quarter expense total due as XX. million, fees million sales non-personnel non-personnel increase $XX the influenced compensation expenses valuations, of with $XX compensation primarily $XX increased to by Linked $X a million. million Deferred in promotion combined expense. contribution professional and Charitable BOKF market business was well The driven Foundation. $X increased a spend onetime

the now will who to CFO, incoming Marty? call forward our I'll Marty turn Grunst, our over guidance. provide

Martin Grunst

Thanks, Steven.

Turning I'll to XX, expectations cover for XXXX. our Slide

to should geographic mid- low utilization and growth. footprint XXXX expect in the for in strong remains growth. line very and of single-digit level this our economy upper during We increases annualized of commitments in an other tailwind outperform markets. high levels loan migration loan The from additional Sizable cycle, may business be given unfunded and

to portfolio XXXX, to added to During securities interest available-for-sale quarter rate-neutral an fourth position. of the closer $X.X we move us billion our

remaining We portfolio levels. demand core somewhat our XX modest Currently, are level deposits loan-to-deposit higher strong expect assuming ratio and higher With in we this of a to attrition base below hold expect and 'XX. deposits the still move interest-bearing in February historical betas while the to deposit point as attrition basis in the more the increase, deposit course XXXX in first We migrate balanced. increases pauses. and half interest position Federal modestly balance demand Reserve rate margin will runs before its of March lower is believe our and interest-bearing at

commissions and $XXX approach was XXXX. interest to $X.X we in to is total million aggregate, X.XX%. Net income The December total, expected interest net for revenue expect billion, In for XXXX. approach fees margin

below the We migrating in QX throughout levels towards this to XXXX XXXX. term, be back level expect expenses short

efficiency ratio We growth an 'XX. below expect nearing XX% continue remains expense in to to revenue outpace by which XX%, resulting growth, year-end

level maintain expect of allowance median strong and reserve. slightly a above we peers Our the our credit to is

half growth and similar for quality, our of the expect we Given second quarterly loan expectations credit the provisions our XXXX. strength to of

repurchases is quarterly and foreshadow share we the provision Current deterioration. asset very material of course, quality our continue outlook Changes economic in commentary. strong not expect to as closing impact will, expense. does our And

Stacy Kymes

results, quarter rising was in bank demonstrate this earnings rate fourth fact, Marty. for for environment. you, the Thank strong in how The earnings the growth year positioned

from events in to neutral XXXX well top this growth. annual nature in our across and becoming moderated benefited our We our to now back rate asset-sensitive of sensitive, sectors. balance in causing growth revenue risk unique interest given loan and the materially to our We sheet We footprint profile. chose the rates line more recorded have drop across asset loan approach We as precipitously. on leaned history, position with as the geographic line focus the business strongest growth more

a fee As year-over-year commodities fees, result decline businesses. base, banking our mortgage and establishing covering investment very XX% records banking new close of in diverse came we in the to our

actual of reserve included $XX compared year XXXX. million provision Last million $XXX loan loss to in releases of

and on line as the new levels, beginning likely continues year the to is produced focus Our very though quality stable be year. products us than broad pre-pandemic Credit well start at revenue set selection growth the of base we unsustainable. the client our better has of positioned and it we our to top

We above continue a allowance to the median our peers. maintain of combined

in core deposits expected matter. to We Banks in with investing proven credit business outperform. stage sector meaningful trading versus a a growth, and the strong diverse discipline where mix, are banks thoughtful should are

for positioned or well move through the shift, year. economy are negatively, We we however should the incoming favorable as

here proud of results. to my at teammates Financial, very am who work deliver I strong these BOK hard

to has will be last company we an and Steven and asset remiss CFO, his acknowledge great As as Nell, Steven our served character. to conclude, long-time our with I'd been call. friend my not earnings this be

his will miss contributions. We

Treasurer with We talent are role. Grunst he became our CFO stepping our Marty fortunate before know fill the of you Risk to such in from Marty strong have time to Chief Many his Officer. as

With are Operator? questions. to that, we pleased take your

Operator

first [Operator from with question is Fargo Shaw Jared Securities. Instructions] Our Wells

Jared Shaw

you Marty, just on forward. that to congratulations new echo and the your congratulations and to with pending in like on And looking role, I'd forward going comments role First, Steve, Stacy's retirement. working

Martin Grunst

Thank you.

Jared Shaw

that terms Maybe and just quarter, sensitivity want duration you in And where additional steps you now more asset being Or portfolio get that, to of we took moves you to funding securities the to on was match this funding looking on that for the at the the neutral? or should some the then be are see positioning? on fully funded there? expect what's to

Martin Grunst

Yes.

look variable increase position out at I the that that progresses. we'll neutral as that's we something of and we the But risk Jared, the funding. be all pretty to we're with It So the happy mean, rate impact position. position that's year got on basis. of that has funded that to continue to rate at generate with look a continuous

played So that's how that out.

Jared Shaw

Okay.

purchases? duration to to start spread securities So see we on. can trade, on the on move maybe as down back expect that rates What's the expansion later

Martin Grunst

Yes.

duration So that those are our than in longer and territory. securities little typical that's that, kind mortgage-backed so of a X-year,

Jared Shaw

the also, better utilization guess, come year. spreads to on have see go and and rate then going into now? said, higher growth, then you momentum as And we what you like forward? Okay. in I happen, Are would And to like the loans on for reengage customers there's, it loan move good back seems that seeing

Marc Maun

long, consistent. Jared, The along spread hasn't, year is really fairly wouldn't hasn't either. this just say, all but Yes. It's Maun. it tracked I say, Marc I'd really contracted expanded

that. significant really in we change any So haven't seen

first I to they've progress positions expend expanding a up to some that before side time. the just, mean, C&I to that have loans. But borrowing. and of rise. business. start that, the some And rate naturally go, customers think, faster rates utilization still cash C&I utilization as they're the more far construction CRE our side, we a in But will been you commitments expect I going see because as up it's has their liquidity from of would go As we than at that continue to that used reflection focusing be from positions, of think It's been I on just just through

Jared Shaw

finally want where think excess on? thing stabilize? you in how the then should that ultimately capital, of here do the you are be you where just control terms would at to or out TCE for like And on flow Is focusing to that us primarily capital? you ratio right looking focusing Okay. on -- And

Steven Nell

ranged in We've is that's and ranged XX.X% of we equity look range this XX% what common -- we tangible Steven. that somewhere between We've to primarily. at a like. That's

buybacks quarters. the Sometimes that But you've last nice we capital. got a are over level constrained of several by total seen we've

We think in And continue rest, growth loan and a in we'll we We quarter. bit little growth towards balance then dividend. support pay to raised opportunistically businesses. use -- just that we'll to the allocate do that good continue to a fashion, our sheet the that, capital

So we about that's think generally how it.

Operator

Our KBW. question next with Gailey from is Brady

Brady Gailey

just a if the to question about Should mean, buyback more company. I for different. I excess could you expect million at XXXX? you repurchased have the capital like potentially. look ask you something stock. Or around feels I guys mean, little than so wanted that $XXX of you similar it XXXX, we of -- do It was clearly X.X%

Steven Nell

say, would I probably similar.

kind executes we'll stock If and that active. think slow little up, seen price quarterly range and feel it profile. of bit. that we we'll opportunistically dollars for been level million We which of to a from a like back depends down us that that we've price more a Scott I million, the be on the has quarter. find the good and anywhere runs kind got to $XX of capital buy $XX fits you've

on But XXXX. see you various that's buybacks would looks similar like. a why contingent I variable in quarters. the market anticipate So again, of But it's those than across what it all XXXX level

Brady Gailey

care. lender in a time, not your couple of it a yes, meaningful long I the next just update your for loan and care quality you Okay. y'all's your backdrop. book. know numbers to just it's But at all on And energy amount credit you're energy out great, a how the experienced maybe weakness been for some hear care and is doing years an of very of about health seeing given pricing BOKF thinking of has, within We're health borrowers. but health start

Marc Maun

senior is health to is has Medicaid costs that catch-up certainly the because housing hasn't on. on which there. Medicare rates our this we around probably the the focus industry portfolio the are with which happen headwinds significantly Brady, with eye labor Marc. Yes. area are keeping the and We care And there the reimbursement completely got primary associated and

seeing a issues little that keep over we're we So on. with time it's of long our in this want But bit -- we've been but time. a eye business to something

selective on. and major the Demographics large on not been about focused regional that operators, We've operators, We've we're who people an focused industry. the understanding chains have very of industry. favor

and customer we're we been with strongest one so And selection. XXXX. attention keep the comfortable in we're going we've to think But that's before cycles to certainly, through our our probably

Stacy Kymes

add, portfolio a in if over from from be or of some in when time, of of segment asset actually criticized years. sector, because entire short-term over when are probably low. XX there it portfolio probably may think our It's you create last about net do our cash about classified loss are have risk, just this where between public the can [ph] rates perspective, levels. longer period segment in flows entire mismatches But charge-off might the the exceptionally or timing lowest private the if XX that my our that expenses our they payers, quality best-performing be think some reimbursed over you operating last versus it's years, incurred classified portfolio. I loan We

Brady Gailey

expect as the couple segment? a of even for job look if it asset revenue All a me, year growth you done guys. next growth to this right. not great out we multiple for for helpful. fiduciary mean, great over finally revenue see BOKF mean, next been How nice quarter necessarily I we just And years, BOKF should -- of in management that source I should at I look but continue it's has growing fees. That's and then years, to or of next

Scott Grauer

Sure.

is alternatives obviously feel asset a and income, money that this that So the both diversified healthy equity just cash our in is mix we about funds, really Scott. generation very our proprietary terms market well us serving between but good which now fixed of others off of fact which well We mid-teen percentage not fee utilize. is

growing lines we nice seeing that business the serve. that assets been that's to of back. various we're in significant really But Wealth So momentum get all in customer generation the Management revenue as and well segments as inside across progress various

attraction decline more we're see -- positioned and optimistic continue market than So given new account mix that with to probably asset be do grow, that feel less to good how account, than our have we others to exposure continue about a skewed segment assets many us. we're and of

optimistic very we're yes. about So it,

Stacy Kymes

differentiates markets during us bit little where declined of time One the value way decline segment and and that equity both there is, the XXXX, personalized into the income people other value year both fixed really the approach, in a asset things a about think that deliver and through we that pandemic the first that. period very if you then time since for of last

that, been strategy of a help we adviser, to And because is grow this more base. touch that's automated today point, -- experienced. things to than a us the that's folks approaches higher that previous to the and term difficult So have the market of about toward the differentiator that like in in are long in for periods or talk to volatility reassure as the to much to market circumstances value ability think us an some asset moving in perhaps talk

Brady Gailey

Steven, color. the retirement. for you. great with Great. Good And on right. All luck working thanks Well,

Steven Nell

very much, you Brady. Thank

Operator

question Jon Markets. RBC Capital Arfstrom with is from next Our

Jon Arfstrom

Congrats, Steven.

Steven Nell

Thank you.

Jon Arfstrom

to while looking And it. but a Marty, it's forward been

Martin Grunst

as that well. yes, Right,

Jon Arfstrom

maybe of on it your do you're but of I NII ease. I guys us Yes. the bit little until in know are rate higher pressures some what Back later focused -- the maybe you you're the does talking alluded and deposit margin? saying it little more to a earlier and lower you feel it of think cadence on can can in But You But a float kind kind guidance. bit of in the Midwest, you guess. to stabilize flow erosion about And year? modestly help year? the the And

Martin Grunst

Marty, is take this I'll that. Jon, Yes.

pretty risk X initially. rate do is position our portfolio And increase beneficial, higher. be year will now that neutral a securities least might the think increase. a to So rate we get just early in or at The rate and we'll modestly continue to reprice

those dilutive of plays just So And kind going Deposit so of counterbalance there. the revenue for slightly are kind but positives that be course, shift interest to loan will mix net is, be that as ever to out. of margins. growth, supportive

So really at some clear that significant and modest result one other. margin how exactly in in but all way or out decline timing-wise shakes that should the that's nothing it's not

Jon Arfstrom

Okay, okay. Got it. That's helpful.

changes. So down Marc. couple quotes, I of Marc not material a Maybe wrote or Stacy,

and materialize Stacy, good. said credit should slowdown unsustainably is economic said you an You

of in understand on your what or like I slowdown terms So signifying kind material help seeing you're any you're on us credit. where am feel at wrong of loan growth, are that? heads in doesn't it And

Stacy Kymes

This Stacy. is

inverted of from recession I us a we're any precision think a of the I We've holds. over coming last unprecedented. to curve what the soft but a landing. there's to X pandemic deeply that's yield of think to pundits market to level coming got know also recession with interesting deep don't any the listen off it's a months now soft future

metrics the predict that types trying of are all so those people to reliable. are economic accustomed of to outcomes as economic probably not And to use

XX% we're to We're we've We ability grew think you going our if we're and a in achieve year, economy have grow, we're soft positioned if to that landing. billion. the well $X.X is, a viewpoint a landing growth Our grow. going to does organically demonstrated loans footprint and for soft great this

banks TARP. Our bank But best-performing a the of is most. United States credit more one recession regional better your there deterioration, we're the view credit if space. that will that is participate Largest the and much didn't likely bank be footprint than in will then in be in there

meaningful Our credit our performance downturn last through outperformed the peers. materially

typically are our X loans forward Credit forecast. are loans from X are But foggy. We down. our next to months, say, the classified gets After the is really look as see. about down, hard months to easy here, will pretty potential we problem lens

nonaccrual Our incredibly down. are point. low from an loans We're starting

indicate migration just deterioration a low so really credit movement from a really long-term in even And trends, even necessarily levels. some up abnormally wouldn't

don't a any so us going well. think are we If going people history credit our about, people if forecast really our if happen because that that scenario, that to know it's I want that very worried And perform of think to But exactly nobody we're to growth it's that what is event is serve a us concerned. credit then I well and around discipline will scenario the has knows.

Jon Arfstrom

Okay.

So the view from Tulsa is not Armageddon, it's just...

Stacy Kymes

rest was think that's people that there economy. Denver, national our were markets, likely markets entirely Dallas, when our Phoenix, into is in these that happening if of what's may forecasting that than it's Not least. a think footprint the level outperformance view, recession, a core those I about mean, I the is in -- our And the even Houston, material the be level of in-migration recession significant. economic outpacing happening growth there a is of in there the the country because markets far maybe in

borrowers would that the our just that's was that our be not to own consensus that data a in we anything of footprint. we're and recession, be imminent. we indicate we that today there's a there's in So recession when discussions seeing would better But a much with think even thought because going general position

Jon Arfstrom

Okay, all right. I appreciate it. Good luck, Steven.

Operator

with Inc. Instructions] Stephens Matt from Our question is [Operator Olney next

Matt Olney

I on margins. and higher trading is line, higher from of how brokerage into trading that elevated deck And XXXX? levels the On margin? the more that drivers think slide the of attributed color sustainable Any

Scott Grauer

Well, is this Scott.

product that in continue have there alluded spread volatility of of saw volatility in nimble income good fixed rate the mix marketplace, in But Stacy to, we fixed the a capability. unprecedented the all market with that's with fourth we quarter. the We're inside of level arena. well-diversified out reasonably we saw So and uncertainty the income see, markets to the

So we uncertainty continue the we'll margins think of abatement there. volatility, market until enjoy the to on there's better an that

Matt Olney

guidance, Okay, outflow put fourth and of funding, expectations continued do expect back like and guidance appreciate sounds here. And deposits within And pressure that. you quarter stabilize? curious what I'm to to And are. then the demand in we're out pretty assumes going it big this your deposits across that material the you that there industry. seeing when

Martin Grunst

Yes, this is Marty.

give Let little a there. you color me

on part that to first 'XX. continues see And ratio conditions yes, they The loan-to-deposit in there. DDA our Any So presume to it it's kind our of burn of longer our of increase and we year. comes retention some over up we presumes deposits. somewhat interest-bearing the over cumulative attrition factors, deposits out about accommodate either or the does attrition, how of our beta relevant. these think 'XX guidance the no outlook more That's the that change

Stacy Kymes

this Stacy. is Matt,

think in we've a attrition the in I industry seen that deposit markets the around the commentary broadly.

starting couple a long much XXs, were Number I bank low fourth normal. low the be lower us we're need our most one loan-to-deposit think I a peers to than out. I about is of are and at of we've from more think things that that brought That's ratio talking, in XXs end ratio. a We time. at typically space. XX% Steven this much for loan-to-deposit run upper this quarter unique

doing starting are point that liquidity to margin actively and the ability manage this and so we And that. gave us

controlled at gone our through period, event that's need have left the lot wealth sheet off-balance We balance liquidity where a price. have are be a or back broker-dealer that our sheet future brought that other broker-dealer stored funds right our our we can the sources and group, in of wealth our also to through in group, that liquidity effectively that have

So and watching problematic. something we're see actually that not we optimize It's managing our something is shareholders. actively that it's necessarily to for

Matt Olney

Yes.

appreciate you Stacy. near-term staying just the And plan I kind the I plug time this mean, Okay. it I use of that's mentioned could that, but of guess borrowings And event. liquidity store sound Stacy, some obviously here. kind you like at the fourth topic a quarter, In to didn't funding the of some hole. on that was some

least the at of for I first plan, the the is half what funding for year? So guess,

Martin Grunst

Yes.

in the So some would throughout deposit and we the trends both really see year usage wholesale of side. the a wholesale overall on stabilization

for our a to have know, of is you which for XX, funding really overall base. I back mean, ideal of the core that U.S. vast government to FHLB. agencies our part FHLB And normal years. majority As are funding as portfolio XX pledging us securities goes it's

are So some normal And all anomaly. at it's that profile the years point. recent going the balance to to really we're of get sheet couple eventually,

Stacy Kymes

loans securities to where we're didn't that's It's of fund historically. still mechanisms, whether we be mean, And was FHLB I or or the always we were the been so the pre-pandemic, ran That's through just and funded Matt, book. the for deposits the only kind XXXX. loan Deposits securities really activities. couple December it other Remember, we coming billion deposits way of XX happened. other X in We're years and repo that. book of higher last in today self-funding back view bank $X years than

not So we've upon perspective, based based got pandemic in of perspective, put the to a viewpoint. this on long-term just some

Matt Olney

Yes, fully agree.

Okay.

Operator

to the of I reached have turn like the over closing for back question-and-answer conference would Steven We to our comments. end session.

Steven Nell

today. thanks us for everyone, Well, again, joining

If can you at a have any call day. e-mail us Have ir@bokf.com. us additional Thank you. or great you at XXX-XXX-XXXX questions, please

Operator

conference. This does conclude today's

you may And disconnect your at your lines this You participation. time. thank for

BOK Financial (BOKF) 25 Jan 222022 Q4 Earnings call transcript