{"id":2221,"date":"2023-04-30T02:15:35","date_gmt":"2023-04-30T06:15:35","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/bok-financial-loan-growth-is-the-main-earnings-catalyst-nasdaqbokf\/"},"modified":"2023-04-30T02:15:36","modified_gmt":"2023-04-30T06:15:36","slug":"bok-financial-loan-growth-is-the-main-earnings-catalyst-nasdaqbokf","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=2221","title":{"rendered":"BOK Financial: Loan Growth Is The Main Earnings Catalyst (NASDAQ:BOKF)"},"content":{"rendered":"
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Earnings of BOK Financial Corporation (NASDAQ:BOKF<\/span>) will most probably surge this year on the back of mid-single-digit loan growth. I\u2019m expecting the company to report earnings of $9.00 per share for 2023, up 17% year-over-year. Compared to my last report on the company, I\u2019ve slightly increased my earnings estimate. The year-end target price suggests a high upside from the current market price. Based on the total expected return and considering the risk level, I\u2019m maintaining a hold rating on BOK Financial stock.<\/span><\/p>\n

Mid-Single-Digit Loan Growth to Drive Earnings<\/h2>\n

The management mentioned in the earnings presentation that it is expecting mid-to-upper-single-digit loan growth for 2023, which is quite ambitious considering BOK Financial was able to achieve loan growth of just 0.8% in the first quarter, or 3.2% annualized. Further, the current high-rate environment is not conducive to loan growth.<\/p>\n

On the other hand, decent-sized pipelines and the growth momentum will support loan growth in the year ahead, according to details given in the earnings presentation. Further, strong labor markets indicate robust business activity, which, in turn, bodes well for loan growth. BOK Financial operates in several states across the Midwest and Southwest. Therefore, the national average is an appropriate proxy for BOK Financial\u2019s markets. The Federal Reserve is projecting the unemployment rate to rise to 4.5% this year, which is quite low when compared to previous years.<\/p>\n

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Data by YCharts<\/figcaption><\/figure>\n<\/p>\n

In my opinion, the loan growth for 2023 will likely be at the lower end of management\u2019s guidance. I\u2019m expecting a loan growth of 5% for 2023. The following table shows my balance sheet estimates.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n
Financial Position<\/td>\nFY18<\/td>\nFY19<\/td>\nFY20<\/td>\nFY21<\/td>\nFY22<\/td>\nFY23E<\/td>\n<\/tr>\n<\/thead>\n
Net Loans<\/td>\n21,449<\/td>\n21,540<\/td>\n22,619<\/td>\n19,949<\/td>\n22,321<\/td>\n23,528<\/td>\n<\/tr>\n
Growth of Net Loans<\/em><\/td>\n26.7%<\/em><\/td>\n0.4%<\/em><\/td>\n5.0%<\/em><\/td>\n(11.8)%<\/em><\/td>\n11.9%<\/em><\/td>\n5.4%<\/em><\/td>\n<\/tr>\n
Other Earning Assets<\/td>\n12,348<\/td>\n15,451<\/td>\n18,924<\/td>\n24,950<\/td>\n19,601<\/td>\n17,941<\/td>\n<\/tr>\n
Deposits<\/td>\n25,264<\/td>\n27,621<\/td>\n36,144<\/td>\n41,242<\/td>\n34,481<\/td>\n33,568<\/td>\n<\/tr>\n
Borrowings and Sub-Debt<\/td>\n7,419<\/td>\n8,621<\/td>\n3,821<\/td>\n2,494<\/td>\n7,138<\/td>\n6,663<\/td>\n<\/tr>\n
Common equity<\/td>\n4,432<\/td>\n4,856<\/td>\n5,266<\/td>\n5,364<\/td>\n4,683<\/td>\n5,203<\/td>\n<\/tr>\n
Book Value Per Share ($)<\/td>\n66.5<\/td>\n68.2<\/td>\n75.8<\/td>\n78.2<\/td>\n69.7<\/td>\n78.4<\/td>\n<\/tr>\n
Tangible BVPS ($)<\/td>\n48.7<\/td>\n51.7<\/td>\n59.1<\/td>\n61.6<\/td>\n53.0<\/td>\n61.6<\/td>\n<\/tr>\n
Source: SEC Filings, Author’s Estimates (In USD million unless otherwise specified)<\/td>\n<\/tr>\n<\/table>\n

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