Over the past six months, shares of BOK Financial Corporation BOKF have rallied 17.9% compared with the industry’s growth of 3%. The stock also outperformed its peers, First Horizon Corporation FHN and Cullen/Frost Bankers, Inc. CFR. Shares of First Horizon rallied 11.3%, whereas shares of Cullen/Frost Bankers lost 3.2% in the same time frame.
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Over the past 30 days, the Zacks Consensus Estimate for 2025 and 2026 earnings has been revised upward.
Zacks Investment Research
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BOKF’s 2025 and 2026 earnings indicates a 1.1% and 7.7% rise, respectively. This suggests that analysts are more optimistic about the company’s future earnings.
With BOK Financial outpacing the industry and a strong earnings outlook, investors may wonder whether the stock deserves a spot in their portfolio. To explore this, let us take a closer look and assess its investment appeal.
Stable Organic Growth: BOK Financial has been experiencing continuous loan growth supported by a diversified business model and increased lending activity. Although loans declined in 2021, the metric recorded a compound annual growth rate (CAGR) of 2% over the six-year period ending 2024, with the upward trend continuing through the first nine months of 2025. The bank has focused on expanding its loan portfolio across commercial real estate, energy, healthcare, and service sectors, as reflected in its loan segmentation.
BOK Financial Corporation
Image Source: BOK Financial Corporation
Similarly, deposits have shown consistent growth, achieving a CAGR of 7.1% over the same period, supported by a balanced mix of commercial, consumer, wealth, and small business deposits.
BOK Financial Corporation
Image Source: BOK Financial Corporation
Looking ahead, BOK Financial is well-positioned for organic growth, driven by a strong loan pipeline and rising deposit balances. The company expects loan growth of 5–7% in 2025, compared with $24.1 billion reported at the end of 2024. The ongoing focus on diverse lending and a growing deposit base is likely to support top-line expansion and strengthen the bank’s overall financial resilience.
Fed Rate Cuts Aiding NII Growth: The Federal Reserve raised its benchmark federal funds rate in 2022 and 2023 to control inflation. Higher interest rates boosted BOKF’s net interest income (NII) by increasing yields on loans and other interest-earning assets, helping the bank achieve a four-year CAGR of 2.8% through 2024. The rising trend in NII continued in the first nine months of 2025.
However, net interest margin (NIM) declined to 2.75% in 2024 from 2.93% in 2023 and 2.98% in 2022, primarily due to deposit repricing, which increased funding costs. Despite this, NIM showed modest expansion in the first nine months of 2025, reflecting easing funding costs and improved asset yields.
The Fed cut rates by 100 basis points in 2024 and by 75 basis points through three reductions in 2025, and signaled the possibility of an additional cut in 2026. Despite these reductions, BOK Financial’s NII and NIM will likely witness growth, given lower funding costs and improved loan demand.
Improved Asset Quality: Over the past few years, the company has demonstrated strong improvement in asset quality, with credit metrics consistently surpassing pre-pandemic levels. Over the five-year period (ended 2024), non-performing assets declined sharply, posting a CAGR of 24.6%, with the downward trend continuing in the first nine months of 2025.
Similarly, net charge-offs recorded a five-year negative CAGR of 40.9% through 2024 and continued to decline in the first nine months of 2025. With a track record of outperforming during credit cycles, BOK Financial is well-positioned to navigate potential economic slowdowns while maintaining a resilient balance sheet.
Strategic Market Expansion: Over the past several years, the company has transformed from a regional bank in Oklahoma into a leading financial services provider by strategically expanding into key neighboring markets. The company strengthened its presence in the southeastern United States in July 2023 by opening an office in Memphis, TN, through its wholly-owned subsidiary, BOK Financial Securities.
Earlier in June 2023, its Bank of Texas division expanded into the San Antonio market, further strengthening BOKF’s presence in Texas. Since 2016, the company has pursued several acquisitions to grow its asset management business and overall reach, including the 2018 merger with Denver-based CoBiz Financial, which enhanced its presence in Colorado and Arizona.
Together, these strategic moves have positioned the company for long-term growth and reinforced its competitive standing across regional markets.
Impressive Capital Distribution Activities: The company follows a disciplined capital distribution strategy. In October 2024, the company raised its quarterly dividend by 3.6% to 57 cents per share, reflecting consistent annual dividend growth. The company has increased its dividend five times over the past five years, with a payout ratio of 27% and a current dividend yield of 2.11%. Comparatively, Cullen/Frost Bankers has a dividend yield of 3.12%, while First Horizon has a yield of 2.51%.
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In addition to dividend, the company actively returns capital to shareholders through share repurchases. On July 29, 2025, the board approved a new share repurchase program authorizing up to 5 million shares, replacing the November 2022 program. As of Sept. 30, 2025, 4.6 million shares remained available under the plan. Given its earnings strength, BOK Financial’s capital distribution activities appear sustainable over the long term.
Rising Operating Expenses: The escalating operating expenses remain a key concern for BOK Financial, putting pressure on bottom-line growth. Over the six years ended 2024, operating expenses recorded a CAGR of 3.4%, with the upward trend continuing in the first nine months of 2025. Further, the expenses are expected to stay elevated due to ongoing investments in technology and higher employee-related compensation, which are aimed at supporting long-term growth but may continue to weigh on near-term profitability.
Liquidity Pressure: The company’s liquidity position remains relatively low compared with its elevated debt levels, raising concerns about financial flexibility. As of Sept. 30, 2025, the company had total debt of $4.2 billion, including funds purchased, repurchase agreements, and other borrowings, while cash and due-from-bank balances, along with interest-bearing cash and cash equivalents, totaled $1.4 billion. Thus, the company’s relatively low liquidity, combined with significant debt obligations, could limit its ability to meet repayments if economic conditions deteriorate.
In terms of valuation, BOKF stock appears expensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings (P/E) ratio of 13.34X, which is higher than the industry’s 12.98X.
Meanwhile, Cullen/Frost Bankers holds a P/E ratio of 13.03X, while First Horizon’s P/E ratio stands at 12.02X.
Zacks Investment Research
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While higher operating expenses, liquidity constraints, and a slightly premium valuation warrant some caution in the near term, these risks appear manageable given the company’s resilient balance sheet and earnings outlook.
The consistent loan and deposit growth, improving asset quality, and favorable earnings estimate revisions point to a bank that is executing well despite a shifting rate environment. Strategic market expansions and disciplined capital returns further strengthen BOKF’s long-term growth narrative.
Overall, BOKF stands out as a compelling choice for investors seeking exposure to a well-run, growth-oriented bank with improving fundamentals and shareholder-friendly policies.
BOKF currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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