BOKF - Earnings call transcript Q1 2024 | BOK Financial Corporation

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Operator

Greetings. Welcome to BOK Financial Corporation's First Quarter 2024 Earnings Conference Call.

As a reminder, this call is being recorded. And I would now like to turn the presentation over to Heather Worley, Director of Investor Relations for BOK Financial Corporation. Please proceed.

Heather Worley

you XXXX us Financial thank Financial's discuss and Quarter First Results. morning, for to joining BOK Good

Our CEO, cover Stacy Grauer, will Maun, and Executive cover Kymes, credit our will provide President related results. of Regional opening Executive for our Vice Banking, Wealth And fee-based will metrics. our President portfolio Vice loan Scott comments. Management, Marc

Our forward guidance. our the quarter CFO, Marty and Grunst, will then discuss financial performance for

on you turn Slide I on The regarding slide our available Slide to presentation the Kymes, We bokf.com. will over X. are statements disclaimers and forward-looking on Stacy website refer X call. any will made the press at this begin who to release during call now

Stacy Kymes

Heather our to Thank you, excited Heather. team. to We're welcome

million for We diluted special have $X.XX been are per million pleased items, report notable assessment, in have $XXX.X to repositioning EPS $XX.X EPS and share. Net or per earnings and Adjusting the as of such share. would AFS of would FDIC $X.XX income quarter been first

Before the I on to BOKF, based the is I discuss our approach strategy. quarter, from about our talk the term. At highlights long would like first

We shareholders. for performance on profitability creates our sustainable driving are that focused value and

a is produce a credit financial full-service Financial company loan deposit franchise. businesses services core and solid BOK unwavering portfolio, attractive discipline quality, with income a fee and top-tier diversified that returns

times to Our are footprint others us business, risk open remain is portfolio when allows located in culture for during dynamic, growing high-growth strong markets, and pulling management our actively back. our

have [indiscernible]. We team management a seasoned deep with

years at organization. and years leadership team this of of has industry executive an experience XX Our average XX

company's our Through invest market cycles, in consistently we growth.

than when of pull and that We've allow our are now XX Antonio in market capital in this take generation. the and which more back. us added A Our market to new expand and business example favorably of progressing client is liquidity seeing ample market, San anticipated. already investment employees is meaningful clear relationships others share levels

also of in have Texas, our market. X expansion XX wealth in Austin further and we mortgage employees Central employees the a part As

with We also income expansion added XX which will team members trading team our fixed for complement activities. institutional our Memphis sales our existing

a fundamental XXXX Gallup people. we We proactively knowing collaboration Award. ambition, independent our is only is culture to our Talent and key recruit to I'm inspiration us announce acquisition for is is that of receive for recognized culture. future Exceptional thrilled to wanted XX greatest tenacity. Discipline our as asset Workplace And one that is a our to value. were of validation organizations our of This generating differentiator strategy. credit of I highlight one our part

If you look our back to crisis, own the we outperformed average, were while our above our costs materially great financial credit well peers.

banking real we managing outperform basis. regional costs there largest particularly and an is last the [ risk on prudently the never renewed in been credit contributed management credit focus participate years, space, focus will several and This this and area the holistic have traditional on ]. a of sight estate. is to believe our over Industry-wide being bank not where to in We continue Tork with low lost very but credit to us concerns relative commercial growing

of We've maintained historical credit credit led long-term our our losses by impressive shows insistent business slide an performance. that to have that highlight credit added We presentation better peers team standards to our same management versus the credit to historically. performance with line a

area well performance in around ability an this to should Combining ongoing moving in perform strong concentration investors with credit limits forward. confidence further historical give our commitment

real balances And today, in XX% we real Tier outstanding We concentration and have a total commercial approximately of limit of X estate. capital commercial XXX% versus estate of commitments have reserves.

industrial which has relationships. growing like energy commercial the and and on of lines our specialty Over focused care, our years, have health business core we increased

commercial core investments last returns X% years, in growth businesses we quarter made and in the in with We've the annualized commercial first those our evident loans. several see over

Many see since VISA to at We Another monetized us stock. our you their full position fully the this to long taking we the way discount. have XXXX now the shares retention a hold. view considerable is shares expect receive held B value Class for in on and of

move to remain Moving by period and our end X% forward. ] to Slide average deposits confident million as growth $XXX continue loan in and grow linked with this driven balances our X. teams loans, Period-end or increased commercial [ pipelines quarter, we quarter. Both

significant balance Our other our peers loan-to-deposit meet on XX% to future liquidity below ratio declined loans slightly and remaining sheet and or demands. well to providing liquidity

two seen decline are pace quarters we a and at we now net have with margin believe trough. the of slowing We consecutive interest

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

to Finally, with we proud and valuations. over I'm Marc. in quarter that reflect call of to team morning. this put repurchased attractive over has you of company quarter the and take that, to confidence together advantage the time the it shares review turn this XXX,XXX this With our to repurchase appreciate the long-term I'll

Marc Maun

wanted Stacy. X comments regarding take reference moment credit. I reinforce Thanks, to Slide a and to Stacy's

we way culture fundamental credit Our business. is to do the

stress base of experience calibrated but which evaluation of not only to We each shocks. business, all interest including during credit underwriting are to underwriting in a have strong loans lines our also process, testing subjected of rate being the standards that our involves

next reprice based consistent, designed of Our approach in are disciplined on loans commercial process our conditions. is standards to economic the rate and CRE XX% Approximately fluctuating year. avoid a floating or

The has book us. concern borrowing have significant loan reflective already variable rates. We don't credit shocks. our repayment always a is in factor seeing of for performance principal you're higher this of current been So a

manage credit identify the As we actively book, monitor to issues. we

any our can, that which higher ratios make we occasion, loans We are to look concerned than are quick downgrade on criticized with, peers.

via we effort collaborate with special the credit management, resulted with of loan clients throughout assets with rehabilitate, prudent and or end full and losses, our bankers very arises, historically line results proactive on exit which this credit our minimize the outcomes. management modest underwriting an team. long-term believe front active process If with Slide We illustrated is the in during better has standards life to on cooperative loss issue Combining the X. management repayment in

Overall, X. X.X% loans Slide up balances the increased with during yields to linked quarter. business increased points linked the basis Energy quarter, down Turning Portfolio X.X% increased CRE in X.X%. commercial and quarter. Loan loans X X.X%

by energy our XX production composed senior of with employees. of book gas-weighted in-house full-time staff engineering approximately XX% secured and oil-weighted first XX% tested As as evaluated XX% of a lien reminder, book lending is borrowers. natural borrowers is the our stress

general well lowers are loans, C&I least Our our very at pricing the Combined year, X% energy risk next customers for grew loans the linked services core hedged and which collateral. commodity quarter. our business meaningfully on

secondary flow Our through our adequate focus is in while credits banking full this with cash lending, of to market structuring risk. minimize relationships on our repayment sources developing

business loans healthcare Our increased X.X% quarter. linked

skilled and but predominantly operators line The with specialized a in multiple a integrated for deep their equivalent stabilized Medicare, diversity of knowledge footprint national pay Roughly ratings has mix and senior focused that the regional of markets. is with of combining business housing, facilities healthcare nursing on X/X providers. locations Medicaid-based, are investment-grade health of is living, diversified systems portfolio private senior other

space. We have a long in underwriting history this of strong

decreased business quarter-over-quarter. X.X% CRE Our

in process, to performance stress multiple that we those Loans support. interest are we Setting tests differentiate concentration. underwriting our two this shocks. that mentioned, first is subjected payment disciplined rate will a factors managed Stacy credit including that there the aside underwriting As in are strict our guarantor standards, stress and believe key cycle:

economies CRE loans. location. have geographically have in areas We have we most the but strong have in City footprint exposure meaningful and known diverse, exposure such very our on is portfolio York is to following With pullback New in within of their and seen shown support little geographic Los counterparties importantly, is as XX% that which the supporting second time a of slide. country prices, with demonstrated transactions; This Angeles, our long in the for the over commitment largest that and

well end agencies quarter. the resulting quality and historical assets those $XX loan you portfolio U.S. this exceptional and loans decreased loans decreased to continue levels million Nonperforming Committed a as X, basis Slide credit The levels. $XX will excluding On linked criticized of nonperforming Nonaccruing by below quarter. points guaranteed XX percentage basis points. assets assets period XX learns notice capital. repossessed government across to million assets decreased below pre-pandemic to and remains remain pre-pandemic well

XX far basis beyond Net charge-offs points trend points. last our or million to and first extending points for XX of basis averaged basis historic have the over XX the loss the performance $X.X range XX of were months, quarter annualized X

cover million $XXX quarter well the forward, losses combined by consider you sufficient and operating or credit loan metric reserve below Looking loans historical environment to provision remain the stable outstanding allowance the want believe our to is for of growth reserved million levels. norms. expect remain nonperforming The end, we a reflecting credit expectations. holistic Xx. appropriate a of charge-offs assets net reserve We of if comparative most combined a X.XX% with is $X with view at We reserve to

and continue economic supporting loan conditions. maintain reflective We expect reserve of to an growth appropriate to

my now an call and cycles to in well Scott. during I'll As slowdown And are the comments, traditionally I and turn opening should have credit materialize. challenging we mentioned positioned economic over outperformed

Scott Grauer

Marc. you, Thank

businesses added BOKF that stability, management, provides commitment speak Slide individuals, the to as experience transform XXXX, have on. roots. been trust we for clients. institutions and to our company in financial long committed to that innovative Turning wealth first our families foundation demonstrating asset for mortgage XX. our a run we I'm a services can time and rely in are Today, our XXXX, to These In knowledge Oklahoma and as deep rock-solid businesses. and launched management and excited to of

invest from compete larger We at these other We that businesses to income high us which interest fee businesses, income revenue especially well a scale, net gives fee decision is with us. ROE provide these revenue leverage income operate income contribution ability for the provide strategic to BOKF's of strong peer-leading played volatility. comes and well fee and when made stability, businesses which diversity, and which out exhibits in to XX% the operational organizations. earnings has

XXX,XXX Independent in mention The are funds top School To top adviser number A mortgage-backed of XX a of we electronic trustee than transactions the the of U.S. XX scale bank banks mortgage financial these stats United credit and issuing corporate almost Texas a debit few in representing for originator close top U.S., underwriter for of States and provides XXX dealer strength our EFT securities. year to business, processor alone. eighth billion #X X by District XX And billion trustee through unions The businesses, processing mortgage transfer $XX ranked over XXXX. loans, demonstrate which and representing largest accounts. more or TransFund last bonds a and and ships, agency the we're throughout that finally, credit service

representing Turning $XXX.X to contributed on million revenue. fee the cover this our markets Total first revenue, quarter. again and total I'll businesses, XX% of details securities XX. of of Slide income

to which trends, This X.X% Our driven the fixed mortgage and income are the trading trading $XX.X in and revenue versus constituted slightly XX% resulting origination improvement by quarter. million million. by trading higher banking increased volumes during positive fees Mortgage spreads $XX the was volume. increased driven in primarily seasonal in by increased market prior to quarter,

as continues historical lower, some previously pooling we repurchased levels. reaching the forbearance of Margins increased lowest have now loans COVID-XX their migrate of to also

was of This fourth last reminder, million. brokerage exit insurance the Financial down the in to As XX% and a quarter due $X.X BOK year. was Insurance to

Slide asset management our and XX, transaction businesses. to cover to Turning

card Asset increase million experienced by to $XXX spreads XX.X% activity decreased under $XX.X by to revenue of million, X% increasing with million, AUMA in by an management elevated driven levels just has also Transaction revenue increased normalized in following QX. slightly. $XX.X driven

over also effectively. tend related a cover see Fee-based scale expect you you net I'll on have as higher the to and higher ratio see call Martin structure efficiency hand operate with now the to traditional a them return capital. to ratio you And and income But should capital a Therefore, on higher interest as to businesses return cost versus must efficiency increase, build fee to higher a businesses. income percentage of financials. the

Martin Grunst

you, Scott. Thank

Let by me in covering start two items quarter. the

an year. as special additional $X.X expect we estimate this the the we FDIC in of First, assessment from of June million accrued

forward. portion quarter. pretax that securities interest the the equivalent common we've second XX% We was us million $XX Second, VISA VISA's B are shares. X and shares improve in shares on as exchange portfolio initiated going March, of disclosed, a taking quarter, in our will a charge program currently XX,XXX which net of for repositioned hold RB income should previously April to to allow monetize

offset we QX to from this And shorter charitable than amount $XX gain last in generating life than residual one anticipated we in securities we focus contribute that leaving topic. our to be The of this for on look observation to incremental When million a QX. foundation to economic more expect our on QX, securities is took value, loss portfolio the the the period in exchange it the involved. average weighted comes and restructuring, earn-back should

transaction, the good versus a QX indicating a life period roughly for of economic payback the was X.X the X years pickup. sold, weighted years For average very securities

disciplines. Capital liquidity continue management by and rate interest driven robust, liquidity framework, all and management be Turning that to capital, our to Slide recognizes risk are risk interconnected XX. which

comparing inclusive largest of in metric this common Our ratio, 'XX, QX equity portfolio is X.XX%, as U.S. the of adjusted third the XX of highest. ours and losses securities when the that to banks capital all tangible at

capital Additionally, capital strong the regulatory of ratios we each across metrics. have

at current very enabled of us ratio stands with remained at positioned uninsured as coverage liquidity actively share buyback. in opportunities growth this well and deposit and deposits Our organic as our to well capital XX% loan-to-deposit billion. has Being $X.X XXX% pursue and of growth has robust quarter's noncollateralized

shares quarter, an share. of of repurchased the During price XXX,XXX first we stock per over just XX.XX common average at

the will continue opportunistic repurchase be share coming about We over to quarters.

Slide to XX. Turning

DDA that was First a was decrease was of basis total by decline to subside quarter million income beta expected. decrease deposit interest end million, continued net by our migration the quarter and the count. margin X extent interest a million, primarily day linked pace driven compared The with Net of to lesser deposit $X X.XX%, deposits. as of of quarter, repricing. and DDA At $X.X was point QX, to $XXX.X the to and first was XX% through-the-cycle due XX%

assessment mostly of or $X.X expenses This decline in We results quarter in FDIC million quarter consistent recognized explains to total XX.X%, and million the fourth decline expenses million with in $XX.X first in Linked in Slide the of to total quarter All attributable quarter. activity. the XX. assessment Turning million quarter decreased the special $XX.X the initial quarter. the remaining prior of the another and were prior quarter. linked largely expense a most $XX.X

to Turning our This for outlook XX. XXXX. Slide provides

period-end expect basis be total have loan growth on We X%. loan good X% momentum growth in to commercial and to a

this XXXX two same is and the quarter. for range will consistent the send last as just We be in forward over couple has We've Reserve item, ago. We income it on provided interest outlook the believe a margin billion. was a by weeks a of as cuts of numeric Federal did but interest curve net our basically rate reached XXXX, trough total $X.X with net

conditions to We the reserves XXXX economic persist. as loans steady expect and expense to be combined provision similar grow to XXXX levels to total and outstandings ratio remain we

followed Stacy. by I will be for hand operator which that, remarks back With closing the like would to the to Q&A, call from

Operator

Markets. take question Arfstrom from We'll first Capital Instructions]. from RBC Jon our [Operator

Jon Arfstrom

all You right? hear me

Stacy Kymes

Jon. now, can to from hear Good We you.

Jon Arfstrom

and On bit or if Slide can terms touch pipelines? terms general Marc, but you're you the X, just in it's for services know at you're a the curious I trends and combined Marc, business, general you of but what Stacy on Good. of know, seeing I changing pipeline in business Good. seeing if all? Okay. little the I'm don't you, they're

Marc Maun

Yes.

our credit have I our the And pretty far, open out pipeline position, metrics efforts. able take C&I some for pulled of and effort we're opportunities, well. be we've we advantage when active pipelines, liquidity our a build been pretty been good forth back at see and business. So our to has mean looking strength. little, so competitors to our to still when of given calling

When well you're more some that Energy the healthcare, right things looking just are also. the just pretty at on going of is it's growing in of been reflective economy now.

we the side commercial expect we overall, of experienced the kind first growth the continue on quarter. in that So to see

Stacy Kymes

Stacy. our we of of are see that. capital they of kind think it, their and coming pipelines if think our growth about optimistic you Jon, excited how business I and given I given liquidity think I broadly over this is we're what about really the mean, mean mean position, kind how about footprint, lines I commercial about very time.

particularly how loans over a little headwind only today, the of think is to have -- real to will get we time, estate those forecast how estate but make pay we takes there. real in it we're it I that don't commercial while well takes time to do, downs If kind commercial plenty know there. real headroom of whether we behave, we replace

so the guidance. really quarter, -- the mentioned And on think, had, last from today. I And I was only that's that think I think still that wildcard true I we call our

we're I about very think commercial. optimistic

we're real estate, will optimistic grow payoffs the fund about the commercial card there, timing to commitments think our to of I ability those wild the but there. relative will be when

Jon Arfstrom

pick Good. for And Not out to like And burning the then you, the a Martin. that. you pressure migration? you'd about lot migration. there themes That's on feeling to but on DDA you're just how one any curious about is call there? talked out And here, DDA Okay. Are helpful.

Martin Grunst

we And say. the is out, do burning think as Sure. Yes. you that pressure

within quarter, if were declines much just saw the we you all look pretty the in So January.

then where little landed into out March were pretty where in much and pretax then leveled and in and February build us of get So April, even on And and consistent we March. with as that April all were February XX, was still April we came out. saw a you bit look season that

there. still a point burnout do is bit more that, I us is that gives little a there go. So just pretty confidence good to that reaching think

the outlook. that we think about done, don't pretty feel it's absolutely I good but So

Operator

with Davidson. question Peter We'll Winter from next take D.A. our

Peter Winter

outstanding. been have trends credit Your

think are guys decline problem just a I nonperforming little loans? you few more assets. on color criticized the provide in see the banks one you and Could a to of bit

secondly, you're I just in net expense still the guess, the charge-offs then year. And of half second based the on guidance, that expecting provision higher

Marc Maun

regards first. Well, I'll take year. balance anticipate that provision, the the for With to of the charge-offs don't second of part we net really higher

see it are experienced consistent the higher levels, the we come would our last Our with to to loan through the And classified relatively keep in quarters. The few be criticized something we'll has provision growth. improvement driver about nonperforming reserve indications desire percentage flat for have what overall that on that based loan and portfolio. the more

regards don't assets we so systemic With to portfolio. individual criticized forth, the is any and in anything see that particular

fact, number -- had a charge-offs. we've our we one In of which able quarter last has as some our a and of come loans, to opposed been results of CRE our of nonperforming reduction exit to why down, was the

able to criticized manage is So to think we've what going future and reflected classified continue been we're seeing today. be in be to we And our that -- based on the effectively. just

Stacy Kymes

Peter, about here. we're on I big that's a out rightly fully part quality story point think of huge that quarter. this And the our you credit

in I here of growth. think of we I how we think doing strong and We good asset ourselves we're And and underwrite here. terms can we've quality how those think differentiated that both have that. about

it real about and hazy. X good asset of quality kind Our for forecasting gets and months is then

will that just so of a is reversion they talked point start look reason some did like the the pre-COVID. at kind the things And the about mean we there'll be and the mostly to in year to back maybe of expectation half

what We heading in criticized And we but outlook starting how were begin the positive thought and kind in migration, very quarter. the out know that fourth book of that to nonperforming had play that based we classified in and were criticized deterioration see not our on modest here about current We we maybe did direction classified today. is the first behaving and quarter. the we

But And is, a unsustainably for keep feel been like months really way -- next feels it stay at we at good. it's it's it I teased X Understand about but the point, least so or saying so. that internally going to good. some I've lot

Peter Winter

guidance a question, X despite on lower previous really actually you That's rate the the guidance outlook did like fee cuts. rate separate was And cuts. income. And then maintain benefit rates you updated helpful. would it. fee Got had for no income mentioned The

you've would your towards end some got you the So now upper lean into rate the range that of forecast? more built cuts maybe

Martin Grunst

good supported the And given be Yes, a environment. in the saw about Peter, Mortgages helped we that sustainable. the asset. environment that. are even that by asset The of trajectory business. supported businesses on I'd fiduciary kind that by say that will also within mortgage are that trading The do and lift then impact by That just valuation. feel certainly businesses

So item. great feel line yes, we about that

Peter Winter

if given the maybe it on with range, just of the end upper sense towards of the comes some in Any benefits now breakouts.

Martin Grunst

put want pinpoint businesses, don't Yes, to on in that forward of don't good carry I and momentum part but to any through range, certainly the we know. I a those got year. we've particular expect the

Scott Grauer

to thing be would we've the not. kind And the first cuts this only uncertainty going the whether and front, activities without the looking to And elevated is the quarter, see be that even the Scott, rate can continue we're as business an or from you trading on I settled at slightly levels cut. of is period add, into

the about really direction good feel where there. regardless Fed that positioned of the take we might So we're

Operator

Ben question from with Gerlinger next our take We'll Citi.

Benjamin Gerlinger

I I numerical kind was the -- the guess just terms just curious of growth in fine-tuning. of

little of linear noise back fairly of like a through year? is it And from competitors others expect exclude should whereas growth if Or here we potential, and have linear. your indicated paydown the the of kind of half kind you in said of just back I've the same the more the half? bit the Some CRE weighted kind end to of year, towards also more the be footprint,

Stacy Kymes

tough answer. a to question That's

speaking, weighted going half. or more back be generally think to linear than so the it's I in

expectation. that's think I my

is loan know, growth you lumpy. As

more time, it's month it's You backloaded. But have a linear pretty than from bigger. my should trajectory have steady you perspective and over month where flat, a where that be

Benjamin Gerlinger

the a have two but look the in little like talked cuts assuming At sense you kind trough, we And how this that of margin and do helpful. margin seems mosaic or then rate Got should the of quarter normal are rate is at you. your beginning you it shift in no know it now have I terms probably be, about guidance. year, you're that flows That's anticipating? the end potential, be here if you year, at bit of of of where mix cut there the a cuts, the any of might

Martin Grunst

so Yes, here year, middle margin or get do think Ben, and whether then our here rate the still troughs we later not, that year. you we two cuts an the those stability uptick you see in in get some the of

builds we that. Our time, from more curve, get rate benefit that don't get in that cuts you a that's that fact quarter out benefit get gigantic the a you steeper X of and something is from over

the way, the end coming up towards we see year. either of So margin the

Stacy Kymes

revenue I to about movements we the think because steepening point over be interest less as the margin pretty neutral think you from think a we're on or perspective, about benefit that mean extent I net but there's rate tend of from that's a going impacting To that absolutely steepening, important rate to us risk more that a time. go-forward curve. materially yield think the basis, about a

short down so us up than a the whether has or much end. impact effect And steepening go to on the absolute bigger rates the

Operator

take our with from Jones next Will KBW. We'll question

William Jones

with obviously was for to I was drove Great right you in some maybe know saw just you quarter some and swap growth? what Could on out guys dynamics deposit the you you the well, just to replace went you touch that just growth as saw it a of on notable nice I called I the trying mean deposits. then fairly the us borrowings you touch what could through in maybe and I that this hoping maybe quarter. the wanted talk guys quarter.

Martin Grunst

Yes.

portion that customer and forth So that's talked to have large broker-dealer on wealth we was making our on some as us to existing held of we've calling of the assets, it's efforts. we're and our both that of sheet with sheet base. balance held before, that And their money that about customer some and our base toggle of in offers a has liquid held Will, balance business able or back

we just as just that that fruitful. so of exactly designed out for and And us. worked was did And that, very some

William Jones

the then guidance, balances just in it is the respect maybe first part like And to remainder the for deposit was And that Okay. year? pull feels maybe year a growth and deposit just the out of here. kind thought with of just the flat line the of that growth lot forward of level

Martin Grunst

Yes.

general with XX% up. We're a a more we growth growth lined very less deposit As want to ratio and keep broader loan or area. comfortable that. rule, defining loan-to-deposit area, that as

the be yes, to it's reasonable line in that to think those so And of are of rest going the year. kind

William Jones

Great. Okay. then back discussion margin And to the here.

imply peak the quarter second the in So the quarter? year. Does or the we late maybe will costs margin maybe that third end at front of deposit margin kind this that quarter, see up stability then of and in

Unknown Executive

Yes.

more but in reprice you're less. I'd happens $XXX loan just pressure and quarters. or multiple to book. smaller same book. those And So the that the up side, deposit existing seeing portion continue rate. peak that the of A same lower quarter in little loan reprice are deposit less positive from drivers deposit the the dynamic while I fixed the fixed don't are know gets say on couple for then a will quarter, just up dynamic to rate little the portfolio. a in rate costs securities Each particular, million The that margin but current rate dollar, each pricing the And of of for

X, go but smaller. believe, the so lines to It actual quarter. this might here, And cross not gets that much we

Operator

next our We'll Fargo. Wells question Okay. helpful. with take Timur That's from Braziler

Timur Braziler

there? of rate are up quarter. commentary, currently markets? looking was just deposits what in at Following terminal being What's of offer rate that's kind last the the time your average And on the for the promoted is line the of

Martin Grunst

Yes.

same So if down the highest XX we highest term, has a that's quarter ago be $X.XX you the offer offer, to every points. of on those brought point. the particular see, just look offer, and high by or kind actually it's And but that's depending X not at versus $X.XX would our -- let's market basis

that a that And seeing. is you specials. easing that pressure the for particular the offer to because so everything bit that are goes say of because we not gives a endpoint it's sense term with to high particular exactly little It's what hard

terminal will you is you're than certainly within lower of if the that it kind does on will, asymptotically of the that point and So slow over right, depend kind portfolio. down, mix that. But time. just

Timur Braziler

deposits broader time appetite Okay. just for And then here. your maybe

loan-to-deposit ratio balance of have could we those off plenty deposits? maturities sheet liquidity roll for now appetite the Or of some the below your during still So see year? the actually you maybe the same course time of is XX%,

Martin Grunst

mean core are that any customers. or that. of none Those anything like brokered of is all that's I

like the So that what serve are fair it's going after. book. It's to and customers piece go off consumer there's not to amount a in We're roll of just a away. that's going

And so that's this a the consumer just rate at part kind of natural of cycle. matures high book over

we continue consumer naturally makes as that slowly grow to that that So just to would book expect trend.

Stacy Kymes

that beginning market the see concerned adding at CDs declines. to if And to rate is we're you're when the time

can perspective. as view there fixed into higher we some that floating we're back that into function the of a so treasury to from you necessarily rate through we're lock to that cost up, swap does begin a not growth those of so because our funds that And locked have we around set

gathering consistently that on. operation we deposit going that's We to a need think core have

item. about interest than have about it And whether particular with that. we really floating rate we how we to more to think we'll risk line back that, that toggle swap think about how profile and you it think holistically just But around our so

Martin Grunst

in -- the up book. well go fixed they like the well, of a don't year, within in and but the with some to And little swap a loan line a Stacy up bit those those longer we are said, that the those. extent line easily very portion rate maturities year And

will that well. So out work

Timur Braziler

couple then Great. a around That's And the just good color. maybe side. credit

are anything outperformance that healthcare portfolio, I'm activities pre-pandemic underwriting in then 'XX, healthcare And to -- pop such across pandemic stark. that's at at post-pandemic. look 'XX. of kind seeing specifically, that versus else the issues sector. And your slide I up of So in results we're looking 'XX and maybe or levels post portfolio your what and pretty higher industry you driving in referring the guess broader and changed charge-off and within the

Stacy Kymes

see don't -- know typically our risk performance a materially I don't that strong around criticized it's over mean been quality risk. the see we classification I asset and risk, is a portfolio care very level different volatility I our not time more here. Yes. classified that broad because for always has loss had is us. that portfolio range in of health

loans loss And health care or perspective historical a care groups doctor in health housing and some the had today like practice systems noncore of But performance X senior couple has around. so losses ago our a had we very X from is around portfolio that. care type been the and We strong. that and book years health structured things

we risk classification on really of core in it. today. some loss the strong how very you're the history, what that. a and health of care we long it having time, That portfolio stable been underwrite is has been is around we a focus businesses it's and always been in good very for book and think vulnerable credit us to feel because I don't we're I performer about really just which that the in But consistent, the has for nature

Marc Maun

exited core And housing, a that the of portfolio. the we 'XX, longer I'll 'XX, there that were was early The senior no that only just like care mid always part been or a add portfolio stable has thing segment of in been portfolio. has which is we in health XXXX the is

Timur Braziler

were maybe commercial and component, migrations. asset estate, kind what it's NPL inflows real in? thread underlying of small me, I for any last the from a know classes those just those some And between of And

Stacy Kymes

Could you just second. You out for ask cut a that again?

Timur Braziler

Sure.

commercial So thread tied real migration there's what that this those in? kind were the NPL those sectors any estate if And quarter loans? of for underlying

Stacy Kymes

took of additional nonperforming end commercial at attributable real really It's and be the the this facility. charge-off for sold look mean it I mostly to increase. loans if on quarter, it loss we estate, you quarter. by no a a content a to office single for We expect modest Yes. modest

of loss single today. have concerns a which don't -- any comprised specific we is loan content was largely a around Really single there. So increase there, the

Operator

Stephens. question We'll Olney from with Matt take our next

Matt Olney

competition to question. businesses. your overall general link a want of I ask about the Just level core within

providing then the if back spreads. feet? competitors Are on over on kind curious there's talked and here. about think any change And still we've kind I pulling of of their back I'm last bank to any just few add quarters, for these the some opportunities new loan update competitors just customers.

Stacy Kymes

was what trying think banks banks levels. regional capital really the and the levels regional larger I their Matt, you liquidity some manage and to saw of

some starting not spring, come into particularly I aggressive, their less there. the that. larger generally seen market would starting before were to speaking, so benefit they but a little from last toe side, were water a they're bit maybe corporate of And put the in bit, the back on and we've to the say, back little like end

I going spreads -- of stable. corporate to I think side think are larger be that the generally end on

see clarity until little they then But think the we a be. generally I past. and to expectation maybe say flat. been figure that Basel get more folks relatively today, remained out as I have would there our in they've that's than And has game in widen even speaking, the capital what aggressive structure less some spreads bit we being around with perhaps corporate III

Matt Olney

of for that end me guidance reasonable expense And the here appreciate you the guidance? on that Stacy. that, the the that of we Appreciate also higher variability assuming expense the higher no end Okay. it year, is of then remind But we fees assume base. change. the side, to the of just be I real gave, should expense if were And

Martin Grunst

Yes.

and the continue in on expense tight have space. the just and So make pretty that then trading, And a businesses, direct to two particular, into IT on see the those connectivity. link expenses, generally in those two mortgage you we'll that investments really are brokerage But base.

see third-party might And costs, you fees processing the the date and season so the some variability there.

know, But And first out. the low a seasonally the mortgage the things little other expenses I'd those quarter, in then only as are point you in and are X predictably the those are higher those kind of quarters.

Operator

next Securities. our from question take with Truist King We'll Brandon

Brandon King

commitments the unfunded I down in ticked the quarter. noticed So

could So context I any was that. wondering us provide you if behind

Marc Maun

is a to we've been The stay added lot only generate that actively up to customers. of just business thing seen able flat We've while is used new we've and new of being we've yet. fund it on time has side. seen not commercial and really the The over utilization construction piece it

is increased of utilization rates. stable overall a just commitments So the commitments unfunded reflection and

Martin Grunst

Other theirs than the commercial time. using real estate where they're over

where decline see And so factors. that's you the one of

Brandon King

loans up estate. commercial as us their helpful. That's then give regards customers lastly to as what -- Could an in seeing you're where Okay. for And maturity come what far real for update and just regards you in me, on are that just to request. for at extensions

Stacy Kymes

Yes.

I for as think I it's most to mature close we kind won't typical part. think business loans I that as usual any have of like we just that the in come or mean maturity, cycle. do

mini of of than a doesn't to far, thus different any normal financing. just for have perm kind whole I option us it least kind business. think appear some lot of do that course at the Borrowers

an it's would where put construction schedule through the if amortization phase. you on it So

mean, estate get I what a good to very the we really got But point to which kind they really of then for financing they a permanent seen. mini permanent particular kind we've I a the of real and term, in a first market at mean healthy if loan time, the attribute can accepting quarter, markets the that perm in us. in call payoffs a wait typically And do amortizes capital the commercial portfolio. we portfolio. book, markets had better healthy we've type The place. or and we isn't with having what can X-year really

we're that's of kind doesn't so the seeing there. anything ordinary And -- of not out it

Martin Grunst

Yes, quarters. saw indicates much healthy like that normal Which Stacy rates just couple of this underlying business prepayment that were pretty we the levels higher just the felt course quarter almost a like than portfolio. portfolio. in last payoff said, It of

Stacy Kymes

matter: very that, We And that's in the said bearing There's commercial real and from things two think recourse. geographies really that estate. beginning, out. I

estate real our form have that is some here, we're And guarantor of XX% a portfolio. so differentiator we the seeing commercial have and our and that loans up in support fact of show really recourse

Operator

And a from we Timur follow-up have Wells with Braziler question Fargo.

Timur Braziler

insurance on you on other one companies, banks, Who I that the guess, where those going quick guys a out line were payoff is taking paydowns comments. activity? of Just to? it Was

Stacy Kymes

sources. financing Yes, largely permanent

financing takeouts longer-term where is from. of typically a that anywhere are lifecos, coming commercial from those banks. It's coming kind you other not see So nonrecourse in estate real

Operator

to session. the over additional or question-and-answer Stacy the to any for back like conclude does that remarks. And turn I'd call Kymes closing

Stacy Kymes

our shareholders. you excited our values these for the opportunities us. Financial. on and appreciate to to believe at have this of We to everyone encourage about you I hearing if you spending that long-term we questions and ahead about Heather any risk, on discussion was would hworleybokf.com. decisions your full We remain value for BOK questions tell Thank focused on in display and core generating interest the reach and this always story think unique managing quarter. are the to morning. our we have while time effectively We've predicated I out

Operator

you participation for and disconnect. that presentation. today's And conclude you. Thank does may Thank today, now your you

BOK Financial (BOKF) 24 Apr 242024 Q1 Earnings call transcript