BOKF - Earnings call 4 2023 | BOK Financial Corporation

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Operator

Greetings. Welcome to BOK Financial Corporation Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]. I would now like to turn the presentation over to Martin Grunst, Chief Financial Officer for BOK Financial Corporation. Please proceed.

Martin Grunst

you financial us results. thank Financial's discuss and quarter fourth morning, for to joining BOK Good

our our related Our for financial PDF Maun, of Executive our for Slide release cover fee-based Executive Stacy Vice the Vice portfolio the CEO, slide Kymes Management, at fourth you and refer press Kymes. will on forward-looking President quarter X statements on Regional opening guidance. President presentation are we of results. this quarter Banking, to available the and will turn make to Scott I forward metrics performance now call website any and disclaimers credit Stacy comments. We Wealth bokf.com. during Marc loan Grauer, our and cover will the I'll over discuss call. regarding then

Stacy Kymes

Thank X, and assessment. share or the proud Slide the $X.XX includes team everyone. we $XX.X BOKF I'm of Beginning per a this reported fourth diluted you, on million good results FDIC special of for from the our share which $X.XX income Marty, year. exceptionally morning, quarter impact and net per

of Our focus long-term diverse value both industry stress environment. prepared. economic providing again model year, when been at once always our proven the our half relative team, and to in by the of creates industry has and talented empowers perform during any on business which company the driven was well shareholder our BOKF to This well first was

capital at important also advantage position like others investing risk while that back. in grow markets levels risk to strength are took in our C&I management has liquidity of made management, Central long investments the an of a disciplined thoughtfully core which real resulted in people credit We Texas. We've in this when Our new growing been strong pulling time. beyond extends and

starting were a strong, the exceptionally items, resulting our fourth results nonrecurring great noisy point was numerous for core very While quarter XXXX. in with

reflected will decision related We and returns strategic to of exit fourth on restructure small be highlight Staying margin our gain of our efficiency business consulting assessment available-for-sale securities we've insurance the transaction in which this ratio XX%, resulted sale pretax ahead. which portion insurance our impact our to the growth in a the This accretive Marty special ] decisions was to slide, to make our consulting [ to opportunistically the play $XX capital after the to expense, a for which million interest in and This later. portfolio revenue the quarter. the and continue XX% of was that FDIC the are our brokerage highest. activity months and falls of excluding and will quarter, in business, brokerage

has rules. is process. they the is in liability risk understand comment on regulatory as to hearing partisanship that period. diverge I banking the of which briefly methodology Let caused fully FDIC the public increasing ignored our trend by management poor own. and a will no me comment They special FDIC's did of voted The X-X The public the along profession. tangible invade partisanship banking levels the announced of allowed partisan and letters, hearing was subsequently see only before and use was noble adopt the The to cause loaded the including country final the regulation. Banking rule most as not nonrecurring asset disconcerting canceled low U.S. root capital disappointing which issue, the flawed final assessment, for continues lines decisions. the normalize This was

with necessary collaboration a with element well our and aligned today. our are industry is We missing customers,

term, long diverse well us strategic believe will environment the continue made in we've we forward. positioned decisions this have investments the market in year operating successfully going to operate our any on, and for model and Moving success

million linked increased confident X. did Turning real balances approximately slow average continue but or Slide in teams fourth period commercial as X% end loan grow move Loan quarter, quarter, our in with both Period-end and this the our estate. remain to we forward. to growth $XXX pipeline C&I growth and deposits Both in quarter.

Our [ stable on loan below and sheet other remaining XX.X%, to was ] liquidity peers loan-to-deposit ratio liquidity meet or well at balance significant future our demand. providing

was to are increase X very more to stabilize. this the previous than comment experienced our of to close net about level revenues, interest trough. cost allowing will While net pace interest we but Marty margin the half less quarter, deposits in continued the quarters, we've we our believe

reserve Our and at of combined outstanding our is million we $XXX considerably loans group. the strong, median very of X.XX% credit end, of a quarter above have peer which or remains

additional more confidence repurchased long-term our we this Q&A perspective starting the results call Finally, the valuations. shares the him. now in Maun the and detail. repurchase of attractive Marc to to XXX,XXX credit session, in I'll loan turn provide the our will to reflect take quarter, on but I'll and metrics review before advantage company portfolio over

Marc Maun

Thanks, Stacy.

point an facility partially $XXX decrease of This million by growth at a by bringing XX, the $XX linked X.X% million was driven Period-end December industrial quarter grew XXXX. loans $XX.X Turning an office $XX million. a of to $XXX growing was X.X%. loans, million increased C&I quarter in increase primarily lowest have linked or portfolio office again, million offset by multifamily X.X% balances properties Growth year-over-year. partially $XX industrial this of $XXX offset with with office and year-over-year Commercial loans CRE increase billion, of CRE X. with loans total Total and also modest ] in and rate. by to since $XXX quarter. a loan growth million of $XXX multifamily loans increased [ XXXX, XX.X% million its growth annualized Compared to The decline linked driven $XX loans. was have and, X% or or million million year-over-year were or or Slide almost estate real quarter X.X% loans grown growth

CRE We up. based have X XXX%. we an and internal to commitments, continued for in on presently room of have total reserves is modest as commitments total balances we're loans construction and outstanding XXX% limit fund at limit do growth so of Tier That CRE ample capital

million million of quarter services $XXX As core increased XX, by Health Health have senior million XX% of Energy loans loans, or loans, our driven XX% X.X% grown quarter care primarily year-over-year $XX.X housing X.X% CRE year-over-year balances well the decreased total. million represented or These sector. or $XX million our represented $XXX linked or categories our and combined care balances prior increased $XX and loan increased loan loans December the period-end have general of are loans, X.X% growth of linked portfolio. the our or total X%, at million extends QX or X.X% ratio X%. XXXX XX% with total of of balances Combined to excluding quarters. billion a loan business C&I with quarter, $XX year-over-year with peers. X consistent below total XX% period-end balances $X.X consecutive PPP Year-over-year, growth grown loans. have linked-quarter loans and

increased C&I and and pipeline is quarter. linked X% commitments strong Our combined CRE current

momentum strong XXXX. additional to continued expect in We loan growth drive

Slide X. to Turning

range low be exceptionally The government systemic resulting end assets agencies, historical by this an pre repossessed Tier narrow averaged credit well points period range for consistent months, well see X.XX%. can last continues our excluding X metrics Net quarter, and to fluctuations net model. good and quarter assets quarter. criticized did loans a $XX across trend consecutive below portfolio continued reserves loans $X increase by past charge-offs. in the those of levels. XX experienced in pandemic. below basis years norms X economic continued nonaccrual Nonaccruing with XX to XX.X%, fourth growth increased annualized million Committed the over quality $X.X XXXX, with basis an of fourth or continuing increased X forecast XX credit stable U.S. The indication pre-pandemic compared nonperforming assets, issues. and reflects and care linked charge-offs of XX% below assets XX.X% the capital as far The were performance is You were the basis of for credit historical have $XX provision loan basis that quarter to million in points a points. year-end primarily XX% X the of and the at points to with losses loan and Nonperforming to below million no health our as driven the guaranteed the increase increase over third year second million XX ratio loss

decline as X% to norms. down, by forward, estate, to total on given intentionally expect of workforce now that charge-offs preferences, office manage remain exposure The office less the our in loan trends than markets to Looking net of secured below to real segment representing focused continues we CRE loans be the historical our segment we continue portfolio.

over years, any include quarter our total nonperforming apples-to-apples long-term financials. available X should million have a are X.Xx. conducive of next and comparison office the is not mini-perm The cover at the The to Our for X.XX% assets loans markets if to allowance industry was generally losses ratable or to outstanding reserve reserves. $XXX maturities The combined end. the by credit for X combined and are losses for all option combined we sufficient is allowance

unsustainable Scott. economic reflect economic solid credit remain reserve during today credit turn growth in and we in We cycles an a and are stable a to weaker current maintain well ahead. position slowdown a may metrics the history an past materialize outlook, while credit positioned our be quarters economic call of over expect I'll environment, appropriate with to we supporting loan conditions. in Overall, outperformance the economic have should

Scott Grauer

Thanks, Marc.

Turning the and previous million, with to were commissions quarter. consistent Slide fees relatively Total $XXX.X XX.

for fee results decline fees Management still continue wealth increased to with previous $X.X activities. customers by related our quarter quarter record activities third representing expansion. offset in sales institutional the Memphis income segment Partially million included some a by quarter's our However, their results quarter provided MBS trading highest as lift Wealth recent fourth improve linked high ever. our our to with Trading

activities and record third quarter Corporate Finance investment from Group. bank-wide Wealth Our as banking benefited a for million fell Public quarter the linked $X.X quarter

resulting Although revenue the the units, set retirement Trust, by million, Publican This was in had the business their Finance history a down in majority of Group record asset record Management total prior fourth including driven Corporate Wealth and hedging annualized year from XXXX revenue equips largest in services, X.X%. the their wealth, which investment of record growth X-year quarter. during customer achieving high, quarter by an plan banking. third million, XXXX and $XXX $XXX rate of in record XXXX, our their single Corporate transaction in recorded private

these business compared other $X.X all categories Demonstrating we relatively card remained quarter. and results fee-generating from lines. Transaction the previous increased million positive revenue the unchanged see consistent to

assets management XX% including Our the $XXX.X end year, at XX% equities, of and alternatives. administration an were under the XX% mix or asset billion X% cash income, of fixed

of mix a percentage We income. total a to to of in the us diverse for us interest fee income economic and for in rank allows be as differentiator strategic and a Our noninterest income fee fee decile environments. perform revenue top variety continues well of net consistently

mix to Marty. that, revenue Our during has last the months. I'll the With XX over XX% turn averaged call

Martin Grunst

like recorded this two securities The the in million. of in components well included which and produced which on in personnel onetime gains a start also insurance effectively net in consulting I'd of Scott. of gain losses fees line million assets million, We million is expense reported resulting of available-for-sale line $XXX,XXX services a NIE, is on other $X.X line net $XX as related a in increases items. $XX the opportunity gains total brokerage deferred them few included $XX.X available-for-sale reposition million impact expenses of $XX pretax you, some loss of quarter's reflected Thank personnel items gain took $X.X and $XX this which resulted item. of to to The professional describing million were the is sale value and million in unusual of other with increased gain net by sale item offset which includes $X.X gain of in multiple statement. expense quarter. business insurance income as pretax in to our of our item transaction-related the million, in advantage that portfolio, the compensation market reported as line of There

income the would included $X.X item, of tax investments. the recognition also of quarter effective rate housing of quarter XX.X%. fourth accelerated as Without X The tax low have expense result credit been million for tax exiting the that

X.XX%, decrease QX. million a Slide was margin quarter to a interest compared Net Turning to was Fourth interest $X.X XX. X basis revenue linked decrease $XXX.X net quarter. million, point

compared costs reflected quarter current easing recent deposit XX the This of Interest-bearing quarter. points pressure quarters. in a basis increased deposit to pricing significant

this Reserve rate we Federal pace 'XX. funds However, early since raising the is have in Fed slowest the started realized

Our slide trading shows and the total net percent deposits cumulative interest-bearing business DDA impact a comparability. without came deposit with as of of fourth beta XX% increased XX. This to to to trends down XX% quarter. and the net revenue for interest highlight interest of margin and better December as the

driven quarter, fourth of impact the X.XX% QX, margin that. relative in was earning Growth see primarily by interest by into the C&I assets For CRE net assets excluding followed the during the in loans. after in expect and a third X.XX% going margin, was I versus small quarter. quarter trading decline to the stability

banks well peers. deposits. growth. very us on grew on decreased by million and basis, is XX.X%. peer deposits demand remain a the and in continue as our stronger insignificant $XXX CDs capital increased and to Total our deposits the partially slightly Turning Brokered for quarter. period-end absolute an an level, decreased positions With interest-bearing a billion, amount well pre-pandemic million of $XXX average to below future to deposits just This Liquidity $X.X fourth and offset Slide loan-to-deposit the Average million than up linked our total of decline quarter. in basis slightly be median $XXX funding XX. strong ratio loan

Adjusted is if equity TCE, part interest XX AOCI impact and the up is Our of held securities in be tangible maturity quarter. on falling CETX to due XX.X% in ratio for the term fourth X.XX%. common late losses X.XX%, including basis large points, to unrealized rates would is adjusted XX.X%.

banks buyback organic high growth We recent continued degree have on $XXX opportunistic with and regulatory over primarily support share focused is sufficient capital certainty proposal billion. to capital of the knowing a that

compensation to XX. up Regular cash-based related Turning quarter in business. factors. $X.X the primarily million increase expenses to expansion and sale related million grew led business driven million increased compensation salaries the Linked expenses a $XX.X the XX.X% four $X.X million, expense million $XX.X $XX.X Non-personnel the special excluding increased FDIC to activities due consulting in $X.X Personnel Slide Sales-related related expense, FDIC employee Deferred driven increased million compensation. of incentive valuations, was by assessment. to due insurance expenses primary to And is to quarter to the seasonal expenses were sale insurance linked increases million expense health which lastly, on insurance million business. market to $X.X increased benefits $X.X quarter. insurance costs. operating linked of in by $X.X million, our due and increase brokerage

also $X.X to continuing in We the the support a Foundation we made efforts million serve. our to BOKF communities contribution

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

in mid- single-digit environment tailwind conditions expect be in loans business a favorable Economic should to upper our to The We footprint be by for other geographic competitive loan migration supported annualized growth. and us. markets. from continue remain for

rate a risk and interest neutral to expect available-for-sale holding maintain position. securities We flat portfolio continue our to

expect and by expect are we additional modestly near assuming remain Reserve $XXX no in the XX%. a near XXXX. QX of to commissions full $XXX XXXX In we interest expect range billion net to total 'XX. $X.X income and million in million loan-to-deposit will margin XXXX we in slightly to the rate lower Currently, ratio and for We total fees aggregate, grow changes believe deposits year the revenue and Federal migrate for of to be

increase as FDIC slight at to we a Excluding a revenue expect in strategic mid-single-digit growth following assessment, the at technology invest expenses continue growth with special initiatives rate we and to lag. growth

efficiency approximately XXXX, to in migrate realized is to expect growth the XX%. ratio we revenue As downward

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

in and expect the quality, the loan growth will credit our we half outlook expense. for near-term and trend credit remain expense expectations of in provision our strength provision Changes to our our economic of towards second low Given normal costs the impact XXXX.

for to closing we opportunistic Additionally, I'll Stacy activity. continue expect Kymes to back turn over call the repurchase share commentary. now

Stacy Kymes

Thanks, Marty.

on highest the ever with Financial of This achieved. second the quarter earnings period BOK has the for year the end

is turbulent revenue As economic to storm. proved many again in banks our withstand diverse mix struggled that the once built strategically we environment, any

in other liquidity may great to back, grow be our While position in be business positioned capital we XXXX. have a and organically and very perform banks pulling to well ourselves

into strong expanded We've have going market pipelines We reach. XXXX. our

are quality results. are we very With solid Financial questions. fee take credit businesses your for I'm have of Our strong our hard remains to income pleased proud very BOK these so entire to positioned strong, deliver and growth. team that Operator? that, the worked

Operator

[Operator Instructions].

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

Jon Arfstrom

numbers. a your This had Question is on I've question morning Marty. for times you, this few the

cuts, others I look as rate follow X. X fees interest is X maybe Just like and What and some your X want then as margin well, saying are And just income assuming maybe as net income X cuts. cuts to much to assuming ask to few a with other banks and first. X are interest net but outlook up on

Martin Grunst

very Yes, our question, rates that's curve, steeper X, in or Jon. exposure better declining to with de cuts us. a curve is importantly, winds with that's small, forward actually actually actually more the And get yes, up you But X and range, minimis. that if it's for a that great

scenarios those be the cutting marginally us. year, where this better for you've it So in actually got Fed

Jon Arfstrom

Okay.

to guide. $X.X -- you're the referring So and billion

that could you're if go So more saying we higher. get cuts,

I'm trading Scott flat -- do the Okay. of other your us lower Good of to income what fee guess, rates I lower fee a some as does some to giving businesses? hear. well. guidance then, and And assumes question would -- businesses you're what If assuming for that rates, short-term

Scott Grauer

Right.

itself the increase group in entity trading, mortgage both our be lower environments. with then they a decline have historically, mortgage with big in the lower activity, outperformed two MBS our and those rates as our originations have immediate So our in significantly mortgage beneficiaries rate that of pretty would in mortgage

to So we'd decrease, that to I'm significant backdrop from rise. of I benefit sorry. market rates were mean, get both if

Jon Arfstrom

Okay.

guys actually some would welcome You the end. cutting short on

Stacy Kymes

about but we're There's all-time Mortgages really that that. terms an a the environment, in perspective. of of where performing kind no at very it's at doubt production for well low from

of And if for And help to going more of rates trading aspect so as will, is any that. mortgage going then also really correspondingly downward movement create the inventory, in you that well. to help is business our kind

Scott Grauer

has categories. on group generation that in activity And level the maintained trading other institutional so and pickup revenue with level of that production flattish the

the in that MBS. in would the trading up we our lift activity offset we has which declines So us would But MBS, a municipal overall. see pick give think

Operator

Our is from next Davidson. question with Peter Winter D.A.

Peter Winter

I -- I ago? Can side. the days point environment competitive that that the loan just actually the had And on [indiscernible] you a question you about today a for guys. elaborate just could talk then sentiment had XX you should tailwind a on on question versus be if

Marc Maun

Yes. This Marc. is

tailwind a being it about for right us. absolutely You're

capital very Given peer for some our trying business. back banks feel various all liquidity our with our of that reasons. of lines And little are a pulling credit we take opportunities footprint across of to comfortable situation out position across and or the and We we're that advantage loan and quality. and cutting pursuing back bit are their

] particular focus that [ teams. right away effort our that So area And all any the as from don't now. is sales shying of the we're think there's I

on that's customer selection. been As we've far always sentiment focused as -- borrower goes,

in is opened hanging that Phoenix we'll expansion about too. gives the Antonio really and Denver's focused very, on during grow you new we a those ones to to broadly, Austin, Peter, or well. When San think So very happening support appropriately. to frame doing market tailwind as And positioned are economic of we with in footprint lot Texas, there well. companies see the that's this the time be us going well just we're expand and

too, footprint having to there, think So and give going economic the the us as going well. get states, is just footprint you're better growth to some tailwind by nationally in I

which commercial bit. good to our to along, real the as the risk that we real very of the There's about risk provided level loan But total goes is get estate. overall, I only think payoffs the feel given a we concern the little growth a have elevated we loan mute really guidance could I year footprint. that some guidance higher our growth on

Peter Winter

a health care then the you And million on it. give loans? Got nonperforming about $XX more credit, mentioned you Could Marc, color little health care. the increase bit just in

Marc Maun

support account a to of have loan our and of mean, overall XX% progressed we but or into workout it, expected, had an haven't situation. as occasional we they that loan I those put Yes. now for portfolio. there care had we've loans health here management of things more inside And good

of One more ongoing senior of them is an housing.

of of situation. more One them is private pay a

believe, of they if back portfolios our of in one one-off we guess the go the even it. adds a had range with the not going our narrow it's is will anything years different manage health in if this And have in be happened as some like we've the in narrow we to one-off a we'll charge-offs It quarter, a ongoing we business. they're quarters, be those now. see of for look, look anything, a It's I just health that. loans And care very to same to add credits a other operated of care, you for nonperforming very if business. and And at have side So deals This just to couple nonperforming low not address portfolio. number and quarter another that systemic that, in time, of and range. able quarters it's we I'm over numerous a last reflection

Stacy Kymes

levels, we classified we're I levels were think mean, not the credit the quarter expect I least at it's this elevated. you we still have compared mean we performed next sustainable. guidance quite we that good million. still $X strength. couple feel of provided, mean, at charge-offs our where is strong. look to if nonperforming terms I credit materially not think of apparent charge-offs I in don't as look quarters, I are we Marty forward, and strength And to be over criticized positioned right broadly, But very where in is half I Just where pre-pandemic, that feel we're pretty historically, that are mean, a obviously a we and now.

Operator

next Our with Gerlinger Ben question from Citi. is

Benjamin Gerlinger

better step spreads looks back Just Are bit a risk-adjusted little I a that was into color as side good. you than to pretty getting But curious, the being or guess. there the on are you're more any little people growth you're seeing willing lean growth? bit rates well. appropriate

Stacy Kymes

end, speaking, say, on I'd it some of segment spread as you're looking on what liquidity premium probably mean, coming there. enhancement say in commercial depends from still would competition perspective a maybe it There's the requiring the lot No, marketplace more at generally is that enhancement of on that at lower Part banks the mix. I a of deals, are spread spread there a I the banking is perspective. corporate the that's not result larger that's from there's larger a happening.

lines we're kind first have pushed use thoughtfully is very in this quarter. fourth new opportunity looking for but of were us. trying really, deals the business open spreads And into several our we around can to there prospecting, that closed a business, that little change opportunities C&I. there would higher that to grow spreads of think hopeful the quarter. bit customers because We is just not specialty the over are traditional I we're what But shifts than mix time, saw fact for we than the for creating just actively As in had are the

growth customers prospects hearing and our loan as and optimistic think we're pipelines about XXXX. what our we're in from about we loan So,

Benjamin Gerlinger

the just start implications, consistent helpful work? Got Or the you in the of correct. you. any what to know see if terms of cadence front And on forward kind curve. kind curve of really might is that is Fed of I the cuts That's end a color. to you trading the it need thoughts is of then kind business Do expect

Martin Grunst

in That has think given business, cetera. the in expanding without into et in made business momentum I even changes the we've investments methods, trading rates.

what a we curve to on we be of forward be it And growth expect so top if would trend already plays incremental get out.

Stacy Kymes

you talking the were fee about Ben, businesses? NIR or

Benjamin Gerlinger

fee The The fee. businesses

Stacy Kymes

Yes.

as I fee it relates think Marty at businesses for you. the sure to answered

Operator

with question Stephens next Matt Our Inc. from Olney

Matt Olney

everybody. Good Thanks. morning, Great.

on that fee that Scott back with take the businesses. just your But Going I back fees and discussion, appreciate $XX of through Various components step us think and to briefly a this each commissions. million and touched one help of the guidance John's for drivers fee of question.

growth think like the drivers high that What single-digit guidance the 'XX. tractors I and that are in a implies of guidance? major

Martin Grunst

Yes. Why that, Matt. don't I start on

a the think I where mortgage there, side has opportunity great opportunity probably got of management, are an the the to backs asset brokerage will at there, we'll then production and think that valuations both So wind investments are businesses from Fiduciary that the little actually I us on and servicing going our business. have and AUM in that customary to give we in that And on and momentum that side. asset made perspective, greatest that bit rates. in we've we've flow business, trading the think through new growth have growth

that a to line we percentage see good of expect so And out of growth perspective. business numbers on

Scott Grauer

Scott. Matt, this is

as any seeing mentioned thing look one that we're we're not earlier the I is think carry the that load. category, about total pleased I call, the the in at when that that component you fact

of many operating If international look well product the serving heightened units. in you Management, those of customer diversified multiple set, Wealth all record at set, quarters levels, where generation you we're seeing as we're the and revenue which, geographically year is very levels market by know, categories of a both whole, now across as

the the produces gives of those business, combined in rate us it's the together those out. have more we've So a lines. optimism pieces, steepness in curve -- it's all benefits that investments less about and to across we the to in on now asset operating go if to the rate the our upon that investment been broadly decade result about curve, growth and trading No businesses and as cuts. seen see, the where not dependent It's business, where any we Marty we've historical our because to mentioned, management business momentum continue see no board, Corporate one in we're Fed didn't Trust trading doubt or slope cuts sense some but to what the

in do if we'll if to steepness some were we positioned that the see, So curve, out. think we're shape see but extremely I well

Matt Olney

the Scott. Appreciate over back then Okay. I sensitivity. thoughts there, rate guess to shifting the And

your some neutral how half far what year, as commentary would next NII. or falling those you are on provided down the the the And as relatively be? betas in rate we at it's way versus would just scenario, bank? thoughts on whatever You saw whether good up the the being year a back of way deposit What that on compare on betas think, early

Martin Grunst

Yes.

So last seen over couple you've the quarters, higher. that fact given of the be betas

You're to less you're or that that the exact driven relatively was not at going larger we down as hike. of the in same of so beta as kind mean, get mirror a not those high balances. see betas way that beta upside and got But wealth on you'll lot corporate see come environment. down rate the a each that you've the given on I to image linear, going of you rates know, are more and see

Matt Olney

Yes.

quarter-to-quarter. expense the I can be Fingers then lastly side. on crossed. know lumpy Okay. And expenses those just

I expense quarter it side? things the think mentioned see made in any we the little I but off year the that year start where first more color on a in could -- And you in full quarter. the earlier higher fourth a with on the few guidance,

Martin Grunst

Yes.

you take to million the the that then a fourth you $XXX get number. the adjust assessment, special FDIC million for number, If $XXX and quarter

of out expect coming gate below quarter, a little that. the So be to next we'd

Stacy Kymes

the items BOKF think professional think some Yes. those the particularly being of that fourth of related transaction costs it's core And quarter, and about in some important. embedded to of sale the expense part of personnel that line I already rate I pointed is fees that part to company. not you out, business, are got that There's in run really really of

Martin Grunst

Yes.

through you'll coming of to down out, quarter, a some and So get if taxes first of unusual you but just bit filter little net those think will wages that in up lower. those some on items the

Operator

with Jones KBW. Our next is question from Will

William Jones

a And rate And it coming maybe the but of do NIM NIM if but What X, story? is know confirm, in us unpack rate can expansion expansion could Marty, this X, predicated flat see do looks about does next then margin even flat we you kind that guidance compression year. see that both in your just scenario? rate maybe like X, help we I X will cuts? all of? off certainly hope this rate quarter, get this in then cuts you if environment, margin you guess talked you see stable I the what environment

Martin Grunst

Yes.

when in that trajectory that of scenario out we or basically noise those and later actually minus would what the the we're would usual drivers down that modestly level quarters in at play play the margins basic about of end how bit of bit kind plus start out, it is is the So got course, first scenario of the And year then little then rate leveled you've around a of expecting curve trend. out. the for steepness would think percentage flat a the a to up playing if quarter little margin a that out, just forward supportive be

William Jones

That's like of there? in out leveling to do remix know we Or you Got but took the a kind think getting noninterest-bearing feel I this story? year? this noninterest-bearing deposits like another step you. down do quarter, you you into do how balances are we're about helpful. then And where close feel

Martin Grunst

and about talked our QX fourth on Yes. as saw in call. The was we decline we quarter expected that largely the we

what So little some QX. moves that of quarter, just seasonal the the to a than and sizable, in expect combination we get close pretty -- still for fourth as of you some quarter, us saw are that pretty rate-driven smaller size go but a for declines another decline the we into do we first as that's in normal

see another after our amounts So next of is shift and then, noninterest-bearing of for smaller quarters. you'll step from expectation interest-bearing that, QX down much the into couple

naturally that just tail into as of that out. plays we get As the phase

William Jones

give terms think size? it there end or maybe on could updated market you It Great. coming pulls And M&A, it's just some could feel feels since M&A. like puts feels how be and M&A or a you of Okay. would Could you while thoughts year. of Just out on you like update about into on context us kind of how transactions any market been be bank generally in the we've great.

Stacy Kymes

Yes.

down two more rates have to So do going think come factors. are realistic. becomes I M&A to bank before

resolved. to issues have like purchase some that that positioned. accounting are of some create that's these until still You be acquired until would better are to going happen headwind there portfolios It's banks securities to going and

the there's much to do. us We technology going Texas acquisition difficult a be in to that lot interested fit and for fit profile really needle think the to just and It's is could whole that or like like the a us, invest continue want bank to size today. there. for. stay got We're We company regulatory that sufficient just in want markets for us, and to fast-growing I more and these add be to broadly, incremental, to be process. we're grow, particularly approval continue the of from conversion quicker looking for not to a not lot to would geographic We but that that. acquisitions in not in There's move footprint the distract would we're large that. on largely product

long for technology odd to in to the or acquisition and nothing horizon that continuing us although there so find accretive I bank we And months to to the there's put product us would they a either. low. XX next term, pretty be And we the look on could valuable things are the that whole on be

Operator

Wells with is question from Timur Securities. Fargo next Our Braziler

Timur Braziler

do the spot deposit the you what was Starting deposit end on rate year?p the at have the of side,

Martin Grunst

per spot for se, quarter beta We XX%. the December don't really of for but was was rate our and cumulative month XX% deposit the about

a not really full So lot different than average. the quarter

Timur Braziler

And if the an Okay. is of efficiency actually grow a more consideration these where some environment get the that environment expenses fee expectation into and some higher if could what pick revenues some businesses income looking a rate from still the Is you ratio expenses cuts. comments the fee in is And rate of you happens base? the momentum? as improvement on in see some do case, good to Or income around XX% we that fees? at then up side, the trying down take see some

Martin Grunst

incremental million speaking, good, broadly from could the lift see would $XX overall just trend. is but improvement that some say just I'd you that accelerate a higher revenue

Stacy Kymes

mortgage, running I If think about mean, mortgage is today. XX%-plus you particularly, efficiency probably

business. lift got line if there, ratio a you're get out of efficiency to going you better that of So any

we're Marty lower our any very guidance ratio. But we efficiency So think forward I positive with right, get we should comfortable the is provided benefit rate a environment that there. from be to incrementally

Operator

[Operator Instructions].

from Brandon next King is Our Truist Securities. with question

Brandon King

kind puts your I how to implied up NIR. cut forecast. kind on And what and in year? in expecting of could do trading could you And if play wanted us that rate of out, better So on occurring takes follow you the NII given give potentially just the

Martin Grunst

Yes.

steepening could that -- remains just a some extent be we're So year the the throughout in for sure. roughly assuming we're our guide, that, line get for positive to item that constant you that that

Brandon King

just credit. And then on Okay. another follow-up

of and range of mentioned XX you expect towards part you XXXX also a basis So costs credit more increase in the to normalized kind XX in points. your then of guidance, later

assume Is that back basis XX points how fair it net that maybe charge-offs. of XXXX, thinking So to approach that you're we is of it? half about

Stacy Kymes

No.

basis do year. not XX it's of is Marc We but points. talked reversion, a long talking provision you in some charge-off up just based little levels back always the guide about been to points, XX to time the we've since our little bit a half come a historical But charge-offs. XX basis could seen charge-off around guidance really you we're think I think could levels, see about see on I bit our levels.

Marc Maun

if over year net charge-offs basis XX history, below was points been XX have the we back we've we Yes. been of hit It mean looking our last points. basis XXXX. since I

we for XX to between the last So mainly less XX have XX than operated to XX years.

sure that reserve, to increased going But the have. right see to and those charge-offs the have on coming. economic as that is, where environment we're And make reflecting the driven to driven to we to by we keep we things. -- -- level be have make as more But we by we net the we impact that appropriate now, those continue level net our grow, and don't charge-offs. be going to will have the credit have changes, So it's of given than two reserve going of it's that provision

Operator

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

Martin Grunst

everyone, again, us Thanks joining morning. this for

at ir@bokf.com. If a us questions, you day. have please great any e-mail Have

Operator

you. conference. Thank today's conclude This will

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

BOK Financial (BOKF) 24 Jan 242023 Q4 Earnings call transcript