News Column

BOK Financial profit declines nearly 10 percent in 2013

January 30, 2014

By Laurie Winslow, Tulsa World, Okla.

Jan. 30 --Slower mortgage volumes and increased expenses related to regulations hurt earnings at BOK Financial Corp. , which recorded drops in net income for the fourth quarter and full year. The Tulsa -based regional financial services company announced Wednesday that net income for 2013 was $316.6 million , or $4.59 per diluted share, down from $351.2 million , or $5.13 per share, in 2012. Fourth-quarter net income totaled $73.0 million , or $1.06 per diluted shared, compared with $82.6 million , or $1.21 per share, in the same quarter a year earlier. "All told, 2013 was a challenging year. While we remained solidly profitable, it was the first year since 2008 that we were unable to grow earnings," said Steven Bradshaw , BOK's new president and CEO, in a written statement. "Consistent earnings growth is the key to building long-term shareholder value, and we don't make excuses. Accordingly, our newly constituted executive leadership team is executing on a plan to accelerate revenue growth, enhance our customer experience, and control internal expense growth while meeting heightened regulatory expectations and providing a great place to work for employees." Net income was down 10 percent for the year, but BOK executives knew it would be difficult to repeat results of 2012, which was the best mortgage year in the bank company's history, said Steven Nell , chief financial officer. In 2012, BOK Financial also received a large recovery related to the 2008 bankruptcy of SemGroup Corp. The Tulsa -based energy transportation company emerged from Chapter 11 bankruptcy in December 2009 . BOK's credit quality is outstanding, according to officials of the company, which counts Bank of Oklahoma among its units. "Our credit quality is about as good as it's been in many, many years," Nell said. "We did have some loan charge-offs, but we had more recoveries coming back to the bank than charge-offs." BOK Financial had set up a large provision for credit losses, partly in anticipation of the American Airlines bankruptcy and how it might impact employees, retirees, vendors, suppliers and other business partners. BOK's credit quality coupled with the airline's exit from bankruptcy and other factors contributed to the banking company being able to reverse that loan loss reserve by $11.4 million because it was no longer needed, Nell explained. Loan growth picked up in the fourth quarter, led by commercial real estate and health care lending. Bradshaw noted that health care, which is a fast-growing part of the economy, is one area that BOK Financial is focusing on to accelerate revenue growth. The bank had been taking a decentralized approach, handling health-care lending on a market-by-market request, but now it has brought its best experts into a single business unit as it previously had with energy lending, he said. BOK also is looking at other initiatives to broaden its commercial base going forward, Bradshaw said. Next month, for instance, its Cavanal Hill Investment Management subsidiary, which offers equity, fixed-income, and cash management strategies, will introduce a World Energy Fund . BOK will make the mutual fund available to customers but also wants to explore offering the product to third-party investment firms. Fourth-quarter net interest revenue was $166.2 million compared with $174.3 million in the year-earlier period. After provision for credit losses, net interest revenue totaled $177.6 million compared with $188.3 million in the same quarter a year ago. Total nonperforming assets were $247.7 million compared with $276.7 million in the 2012 fourth quarter. Total non-accruing loans were $101.1 million , down from $134.4 million . At the end of the year, BOK Financial recorded total assets of $27 billion ; total loans of $12.8 billion and total deposits of $20.3 billion . BOK Financial Corp. earnings 2013 4Q 2012 4Q 2013 Full-year 2012 Full-year Net income $73M $82.6M $316.6M $351.2M Net per share $1.06 $1.21 $4.59 $5.13 Laurie Winslow 918-581-8466 laurie.winslow@tulsaworld.com ___ (c)2014 Tulsa World (Tulsa, Okla.) Visit Tulsa World (Tulsa, Okla.) at www.tulsaworld.com Distributed by MCT Information Services


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Source: Tulsa World (OK)


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