BOK Financial NASDAQ: BOKF reported higher second-quarter 2026 earnings and record loan production, while executives said credit quality remained strong and raised the company’s full-year loan growth outlook.
The Tulsa-based financial services company earned $176.5 million, or $2.92 per diluted share, in the quarter, Chief Executive Officer Stacy Kymes said on the company’s earnings call. Adjusted for a net gain tied to the exchange of Visa Class B shares and a small securities portfolio repositioning, earnings were $156.5 million, or $2.59 per share.
Kymes described the quarter as “excellent” and said it reflected the company’s positioning for continued growth. He cited record quarterly loan growth, record fiduciary and asset management revenue, expense discipline and “outstanding” credit performance.
Loan Growth Hits Company Record
Total loans increased 3.4% sequentially, or 13.7% annualized, rising $896 million during the quarter. Kymes said that represented record new loan production for a single quarter in the company’s history. Year over year, loans were up 11.5%.
The growth was broad-based across business lines and geographies, according to Kymes. Nearly 70% of the year-over-year growth came from the company’s commercial and industrial portfolio.
Core C&I loans, which include the combined services and general business portfolios, rose 3.9% from the prior quarter and 11.1% from a year earlier. Kymes said the growth reflected a long-term strategy of investing in talent and deepening client relationships.
“As we’ve often said, growth follows relationships,” Kymes said.
Healthcare loans increased 3.2%, reflecting what management had previously described as strong activity and pipeline levels entering the quarter. Energy loans grew 1.6%. Commercial real estate loans were up marginally from the prior quarter and 6.6% year over year.
Mortgage finance also contributed to loan growth. Outstanding balances were $452 million at quarter-end, up $224 million, with active warehouse facilities totaling $870 million in commitments. Kymes said the business recorded its first month above breakeven during the quarter, less than a year after funding its first loan.
During the Q&A portion of the call, Kymes said the company expects mortgage finance to remain a tailwind in the second half of the year, while noting some seasonality in the business.
Credit Metrics Remain Strong
BOK Financial reported nonperforming assets not guaranteed by the U.S. government of $55 million, up $2.8 million from the prior quarter. Nonperforming assets as a percentage of period-end loans and repossessed assets remained consistent with the prior quarter at 20 basis points.
Committed criticized assets decreased during the quarter and remained low relative to historical standards, Kymes said. Net charge-offs were $500,000 in the quarter and averaged three basis points over the last 12 months.
Kymes said the company saw no charge-off patterns or concentrations raising concerns about particular business lines or geographies. He also said BOK Financial continued to have no exposure to private credit facilities.
No provision for credit losses was required for the quarter, consistent with the prior quarter. Management said improvement in economic forecast assumptions was offset by loan growth. The combined allowance for credit losses was $323 million, or 1.19% of outstanding loans.
In response to an analyst question, Kymes said the company’s credit metrics were better than at CECL day one, and that, based on current credit conditions, the allowance ratio “could continue to fall.”
Fee Businesses Show Mixed Results
Scott Grauer, Executive Vice President of Wealth Management, said fee income remained a solid contributor to revenue, though total fee income declined $7.8 million sequentially to $202 million.
Total trading revenue, including trading-related net interest income, decreased $9.7 million to $25 million. Grauer said results in the fixed-income business were affected by lower customer activity as longer-term rates increased from March through May. He said activity improved in June as market conditions stabilized.
“Overall, our activity levels were consistent with broader industry trends, which also saw a decline in MBS trading volumes during the quarter,” Grauer said.
Mortgage banking revenue declined $2 million from the prior quarter, which Grauer attributed to elevated long-term rates. Syndication revenue increased $3 million sequentially, supported by strong activity and customer demand, producing a record second quarter for that business.
Fiduciary and asset management revenue set a quarterly record, rising $4.5 million from the prior quarter. Grauer said the increase reflected higher trust fees and seasonal tax preparation fees. In the Q&A, he said seasonal tax preparation accounted for roughly one-third of the quarter-over-quarter increase.
Assets under management and administration increased $5.7 billion during the quarter to $129.3 billion, driven by higher market valuations and customer expansion. Compared with the same period last year, AUMA rose $11.4 billion, or nearly 10%.
Net Interest Income Rises; Expenses Controlled
Chief Financial Officer Martin Grunst said net interest income increased $9.3 million, while the reported net interest margin expanded by 1 basis point. Excluding trading, core net interest income rose $6.5 million and core margin declined 2 basis points.
Grunst said core margin and net interest income benefited from loan and deposit growth and fixed-rate asset repricing. Those positives were offset by a 3-basis-point negative impact related to cash margin posted on behalf of energy derivative customers as oil prices moved higher. He said the impact was temporary and that the majority of the margin had already been returned as energy prices declined.
The company recognized a $30.9 million pre-tax gain from the exchange of Visa Class B shares. Grunst said BOK Financial used part of the gain to reposition a small portion of its securities portfolio, realizing $4.6 million of pre-tax losses. He said the move would improve yields on $268 million of reinvested securities.
Total expenses increased $7.5 million, driven by an $8.9 million rise in deferred compensation expense that was offset by gains recorded in other gains and losses. Excluding deferred compensation, total expenses declined $1.4 million. Personnel expense fell $6 million, while non-personnel expense rose $4.6 million, largely due to higher business promotion costs.
Management Raises Loan Growth Outlook
BOK Financial raised its full-year 2026 loan growth guidance and now expects loans to grow more than 10%. Grunst said the first-half loan growth was strong and well-diversified.
The company maintained its total revenue guidance of mid-single-digit growth, but now expects to be in the upper portion of that range. Grunst said net interest income is expected to be in the upper half of the company’s $1.42 billion to $1.45 billion range, while fee income is expected to be in the lower half of the $820 million to $845 million range. In the Q&A, management clarified that the Visa gain is included in total revenue guidance but not in fee and commission guidance.
Expense growth is still expected to be in the low single digits, likely toward the lower end of that range. The company expects its full-year efficiency ratio to be approximately 62%, or near 63% excluding the Visa gain.
Management also said provision expense is expected to be below $20 million for full-year 2026.
Kymes said market disruption has created hiring opportunities for the company. BOK Financial added more than 25 teammates during the quarter, including more than 20 in Texas, along with additions in Colorado and Arizona. He said most of the hires were revenue producers and that the quarter’s loan growth was independent of those additions, given the longer sales cycle in C&I lending.
“We are entering the second half of the year from a position of strength, with strong business momentum and a solid foundation for continued growth,” Kymes said in closing remarks.
About BOK Financial (NASDAQ:BOKF)
BOK Financial Corporation NASDAQ: BOKF, headquartered in Tulsa, Oklahoma, is a diversified financial services holding company serving businesses, professionals and individuals across the central and western United States. Through its banking subsidiary, BOK Financial offers a full suite of commercial banking, treasury and payment management services, as well as consumer deposit and lending solutions. The company's offerings also encompass wealth management, trust and asset management, investment banking, and insurance products designed to meet the needs of both retail and institutional clients.
The roots of BOK Financial date back to the founding of the Bank of Oklahoma in 1910.
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