BOK Financial in Tulsa, Okla., benefited from rising interest rates in the third quarter even as it reported declines in fee income and commercial real estate loan balances.
Net income for the $33 billion-asset BOK totaled $85.6 million, representing a 15% increase from $74.3 million in the same quarter last year. Earnings per share of $1.31 fell three cents short of analysts’ median estimate of $1.35, according to FactSet Research Systems.
Net interest revenue increased 22% to $218.5 million in the third quarter. The net interest margin expanded 37 basis points year over year to 3.01%.
“Net interest margin continued to expand as a result of the June 2017 Federal Reserve rate hike, combined with deposit pricing discipline across the banking industry. This, in turn, translated to record net interest income for the quarter,” President and CEO Steven Bradshaw said in a press release.
Total loans increased 4% to $17.2 billion. Commercial real estate loan balances declined by 8%, but BOK reported gains in all other loan categories year-over-year. BOK attributed the decline in commercial real estate loans to a higher-than-expected number of borrowers refinancing during the third quarter.
BOK recorded no provision for loan losses for the fourth consecutive quarter. Net chargeoffs totaled $3.4 million in the quarter, down 43% from the year-ago quarter. Nonperforming assets totaled 1.90% of period-end loans, compared with 2.12% a year ago.
Noninterest income fell 6% to $175.7 million. Mortgage banking, brokerage and trading and deposit fee revenue fell on a year-over-year basis, while card revenue and fiduciary and asset management revenue increased.
Expenses increased 3% to $266 million. Total deposits increased 3% to $21.8 billion.