Zacks Investment Research | Sep 28, 2016 11:33PM ET
On Sep 28, 2016, we issued an updated research report on BOK Financial Corporation (NASDAQ:BOKF) . The Oklahoma-based company exhibits strength in several areas, including growing loans and deposits and a strong capital position. However, it continues to face challenges amid the persistent low-rate environment and other macro headwinds.
While net interest margin (NIM) has been declining over the past several years, net interest income (NII) has showed muted growth. The Dec 2015 rate hike was not enough to result in significant improvement. During the first six months of 2016, NII and NIM reflected only a slight increase. Though management expects NII to increase for this year, NIM is expected to trend stable.
Further, the company faces operational risks from escalating costs. Operating expenses increased at a CAGR of 3% over the last six years (2010-2015). This trend continued in first-half 2016 as well.
Additionally, the current stringent regulations and higher capital requirements limits business growth opportunities in several spaces, including interchange revenue, mortgage banking and consumer products.
Nevertheless, BOK Financial’s consistent improvement in loan and deposit balances highlights its organic growth. For full-year 2016, the company expects mid single-digit loan growth. Apart from rising loan balances, BOK Financial is strengthening its balance sheet with improving credit quality.Also, driven by a solid capital position, the company remains focused on expansion through strategic acquisitions.
The company recorded a year-to-date return of 14%.
BOK FINL CORP Price
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