BOK Financial Corporation (NASDAQ:BOKF) Q4 2025 Earnings Call Transcript

BOK Financial Corporation (NASDAQ:BOKF) Q4 2025 Earnings Call Transcript January 20, 2026

BOK Financial Corporation beats earnings expectations. Reported EPS is $2.91, expectations were $2.16.

Operator: Greetings. Welcome to BOK Financial Corporation’s Fourth Quarter and Full Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you’d like to ask a question at that time, thank you. And as a reminder, this conference is being recorded. I would now like to turn the presentation over to Heather King, Director of Investor Relations for BOK Financial Corporation. Please proceed.

Heather King: Good afternoon, and thank you for joining our discussion of BOK Financial’s Fourth Quarter and Full Year 2025 Financial Results. Our CEO, Stacy Kymes, will provide open comments and cover the loan portfolio and related credit metrics. Scott Brower, Executive Vice President of Wealth Management, will cover our fee-based results, and our CFO, Martin Grunst, will then discuss financial performance for the quarter as well as our forward guidance. The slide presentation and press release are available on our website at bokf.com. We refer you to the disclaimers on Slide two regarding any forward-looking statements made during this call. I will now turn the call over to Stacy Kymes, who will begin on Slide four.

Stacy Kymes: Thank you, Heather. We appreciate you joining the call this afternoon. We are pleased to report earnings of $177.3 million or EPS of $2.89 per diluted share for the fourth quarter. Full year 2025 earnings reached $578 million or $9.17 per diluted share. This marks a record high earnings per share for both the quarter and the year. Throughout the year, we delivered solid growth and continue to invest in our strategy to create long-term sustainable shareholder value while maintaining a strong and disciplined approach to risk management. During the year, we achieved solid loan growth, expanding loan balances by more than $1.5 billion or 6.4%. This growth was broad-based, both in terms of geography and lending segment.

After the economic pause in the first quarter of the year, loans grew at an annualized rate of 11% over the last nine months of the year. We delivered growth in net interest income and expanded our net interest margin in every quarter of 2025. We maintained a loan-to-deposit ratio in the mid-60% range all year, positioning us for future growth and continued pricing optimization. Our fee income engine, which continues to be a differentiator for us, produced consistent strong results once again this year, contributing $801 million to revenue. This represents a peer-leading 38% of total revenue. Our credit quality remains excellent. We’ve maintained a combined allowance of 1.28% of outstanding loans, and our annualized net charge-off rate for the year was only three basis points.

Our strong performance across business lines has been recognized by the market, as we have outperformed the KBW Regional Bank Index total shareholder return over a one, three, five, and ten-year period by 73%, 42%, and 51%, respectively. I’m proud of our performance this year and have strong confidence in the path ahead for our organization. With that, I will turn attention to our fourth quarter results. As I discussed the quarter, you’ll hear me emphasize broad-based growth. This is a testament to the work we’ve done over many years to position ourselves to deliver exceptional value to our shareholders. During the quarter, outstanding loan balances grew $786 million or 3.2% sequentially. The growth was broad-based as our core C&I portfolio and our healthcare and energy portfolios all posted strong results this quarter, expanding 5.3% in total.

Growth in Texas specifically was exceptional, representing $561 million of total fourth quarter growth. Net interest margin expanded again this quarter, increasing seven basis points. Fee income was very strong, exhibiting again broad-based growth across our various lines of business. Total fee income increased 5.1% sequentially. I’d like to call out our fiduciary and asset management and transaction card lines of business. Both posted not only record quarters to revenue but also record full-year results. AUMA continued its impressive trajectory this quarter, surpassing $126 billion and setting a new record high. Our capital levels remain robust, with tangible common equity of 9.5% and CET1 at 12.9%. Given these strong capital levels, we also had the opportunity to return value to shareholders by repurchasing over 2.6 million shares at an average price of $107.99 per share during the quarter.

Slide six provides a closer look at our loan portfolio. Total outstanding loans grew 3.2% this quarter. Our core C&I loan portfolio, which represents our combined services and general business portfolios, grew 5.5% sequentially. Core C&I loan growth is inherently relationship-driven, requiring time, focus, and disciplined execution. We’ve seen three consecutive quarters of growth in this business, reflecting the progress from those sustained efforts. Healthcare loans increased 3.3%, driven by strong origination activity and funding of prior commitments. Healthcare production remains robust, the cyclical payoffs we experienced in the first and second quarters of this year have moderated to more typical levels. Energy loans posted strong results, growing more than $200 million.

This growth was driven primarily by higher utilization rates across the existing portfolio as well as solid new loan origination. This segment experienced higher than normal payoff activity during the early parts of the year, largely driven by industry consolidation. This activity has moderated, resulting in a more normal payoff rate during the quarter. Our commercial real estate business decreased 1.4% compared to the prior quarter but has increased 12.1% on a year-over-year basis. This small quarter-over-quarter decline was driven by a moderate level of refinancing into the permanent market. We saw a strong quarter of originations in commercial real estate and have a robust pipeline in this space. Let’s move to slide seven. Consistent with the last couple of quarters, credit quality is excellent, so my comments will be brief.

Nonperforming assets not guaranteed by the US government decreased $847,000 to $66 million. The resulting nonperforming assets to period-end loans and repossessed assets decreased one basis point to 26 basis points. Committed criticized assets increased this quarter but remained very low relative to historical standards. We had net charge-offs of $1.4 million during the quarter, averaging three basis points over the last twelve months. Importantly, the limited charge-offs we’ve seen recently show no patterns or concentrations that raise concerns about specific business lines or geographies. Over the long term, we do expect that credit normalization will occur. In the short term, we expect net charge-offs to remain below historical norms. No provision was required this quarter, as the impact of loan growth was balanced by an improvement in the economic forecast.

Our combined allowance for credit losses is a healthy $327 million or 1.28% of outstanding loans. Our results in credit continue to reflect a highly disciplined approach supported by consistent execution and a strong track record over time. And now I’ll turn the call over to Scott.

Scott Grauer: Thank you, Stacy. Turning to our operating results for the quarter on Slides nine and ten. Total fee income increased $10.4 million on a linked quarter basis, contributing $214.9 million to revenue, reflecting an excellent quarter. The 5.3% growth in these businesses is an exceptional outcome. Total trading revenue, which includes trading-related net interest income, was $34.1 million, growing $4.3 million over the prior quarter. Trading fees were up $5.4 million, driven by increased trading volumes for agency mortgage-backed securities. Investment banking revenue, which includes investment banking and syndication fees, decreased $1.9 million. However, this is following a record high for these businesses. Investment banking revenue of $14.3 million is still a remarkable quarter.

Turning to slide 10. As you know, recurring fee income-based businesses are among the most resilient, valuable, and sought after in the industry. Achieving a $7.1 million linked quarter increase in asset management and transactions revenue reflects not only the strength of our business model but also the dedication and expertise of our team. It was a banner year for both our fiduciary and asset management and transaction card businesses. Fiduciary and asset management revenue grew $4.5 million, led by asset growth from customer expansion and increased market valuations along with transaction management fees. AUMA grew an impressive $3.9 billion to $126.6 billion, eclipsing last quarter for the highest on record. Transaction card revenue increased $2.1 million, reflecting growth in volume and increased customer relationships.

Overall, these results underscore the strength and diversity of our fee-based businesses, which continue to deliver consistent growth and resilience across market cycles. With that, I’ll hand the call over to Marty to cover the financials.

Martin Grunst: Thank you, Scott. Turning to slide 12. Net interest income increased $7.6 million, and reported net interest margin expanded seven basis points. Excluding trading, core net interest income increased $8.7 million, and core margin grew six basis points. Drivers of core margin expansion are largely consistent with those for recent quarters, including fixed-rate asset repricing, beneficial repricing of deposits, and loan and deposit growth. In addition, Q4 net interest margin experienced a small net benefit from SOFR spreads and shifting some existing wholesale borrowings into wholesale deposits. That benefit was partially offset by the impact of our subordinated debt issuance. When those funding market spreads return to normal, we would expect to see those wholesale deposits run off and return to normal wholesale borrowing sources.

Within the other gains category, I’d like to point out that we exited a merchant banking investment in the fourth quarter, recognizing a $23.5 million pretax gain. We’ve included Slide 22 in the appendix to provide more color on notable items during the quarter. Turning to slide 13. Total expenses decreased $8.7 million. Personnel expenses were down $3.6 million. Cash-based incentive payments were higher, driven by increased loan production and new business volumes. However, that was more than offset by seasonal declines in employee benefit costs and by lower deferred compensation costs. As you know, deferred compensation costs vary quarter to quarter, but the amount is consistently offset in the other gains line item within the other operating revenue section.

Non-personnel expense decreased $5.1 million. During the quarter, the FDIC updated their estimate of the special assessment, and other adjustments were made, resulting in a $9.5 million benefit. This was partially offset by higher professional fees and data processing costs. Slide 14 provides our outlook for full year 2026. We expect end-of-period loan growth to be in the upper single digits. This reflects a continuation of the growth we’ve seen in our existing portfolio, which has grown above a 10% annualized rate over the last three quarters, and meaningful contributions from our new mortgage finance segment. We expect net interest income to be $1.44 billion to $1.48 billion, which assumes two cuts in the latter half of 2026 and a slightly steeper curve.

Our rate curve assumptions are broadly consistent with implied forwards. Fee income is expected to be in the $800 to $825 million range. There are two drivers here. First, we expect our portfolio of fee-based businesses to grow revenue at a mid-single-digit growth rate in 2026. Second, we expect a steeper curve in 2026 to shift some of the trading revenue out of fee income into net interest income, as we’ve discussed on previous calls. For total revenue, we expect growth in the mid-single-digit range. Please note that our baseline 2025 total revenue number of $2.18 billion includes NII, fees and commissions, as well as the other gains and losses in the other operating revenue category. We anticipate the growth rate for expenses to be in the low single digits.

We’ve been very thoughtful about aligning our expense base with the future needs of the business, investing in growth areas, and focusing on efficiency in more mature areas. This should result in a 2026 full-year average efficiency ratio in the 63% to 64% range. This ratio should migrate lower during the course of the year as revenue continues to grow. We expect 2026 provision expense to be in the $25 million to $45 million area. This reflects our upper single-digit loan growth expectation and a very strong starting point in credit quality that we can see today. While we see no tangible evidence of credit normalization beginning in our portfolio, the guidance does allow for at least some amount of that eventual normalization to begin later in the year.

With that, I would like to hand the call back to the operator for Q&A, which will be followed by closing remarks from Stacy.

Q&A Session

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star then the number one on your telephone keypad to raise your hand and enter the queue. If you’d like to withdraw your question at any time, simply press star one again. Your first question comes from the line of Peter Winter with D.A. Davidson. Your line is open.

Peter Winter: Thank you. I was wondering, the loan growth has been really strong, and you’ve got a positive outlook for loan growth. But could you give a little bit more detail to the drivers to this upper single-digit loan growth? You know, I noticed that consumer loan growth did moderate in the fourth quarter, and commercial real estate was down, but you talked about the refinancings to permit finance, but strong pipeline. Just some of the drivers, including, you know, mortgage banking, mortgage warehouse as well.

Stacy Kymes: Sure, Peter. This is Stacy. I think the good news about the loan growth really over the last nine months is how diverse it’s been. It’s been diverse by geography. It’s been diverse by lending type. Significant growth, obviously, in loans in the fourth quarter. About $100 million of that was driven by mortgage finance business. The change from third quarter to fourth quarter. So it contributed in a meaningful way, but it wasn’t the main driver. It was diverse across all the areas. I mean, if you think about loan growth for the year, early in the year, energy was a headwind. Here in the fourth quarter, it became a little bit of a tailwind. In the fourth quarter, commercial real estate was a bit of a headwind. But for the year, it still was up solidly double digits.

I mean, I think that’s the kind of the beauty of what we’ve created here is we’ve got a lot of diversity both by lending style and type as well as by geography. And it ebbs and flows each one over a period of time. It’s not necessarily all linear but has worked very well together. I mean, I’d love to give you the main driver, but there’s not a main driver. It’s very diverse. Across particularly the C&I world where, as you know, we’ve made very significant investments over the last three years both in terms of staff and expansion. And so we’re really seeing the benefits of that.

Peter Winter: Got it. Thank you. And, you know, positive surprise on the level of share buybacks in the fourth quarter despite strong loan growth and where the stock is trading. But how are you thinking about future share buybacks? And do you have a targeted CET1 ratio?

Martin Grunst: Yeah. Peter, you know, we this is Marty. Yeah. We don’t really have a targeted ratio. I mean, as you know, we’ve got a long history of our share buyback activity being opportunistic. And the Q4 number, you know, that kinda connects to the sub-debt issuance we made. So as you think about us share buyback going forward, just reflect on our long-run history of doing that in an opportunistic and shareholder value-oriented manner.

Peter Winter: Got it. Okay. Thanks, Marty. Your next question comes from the line of Michael Rose with Raymond James. Your line is open.

Michael Rose: Hey, good afternoon, guys. Thanks for taking my questions. Maybe just to follow-up on Peter’s question of the buyback. Looks like on November 7, there were 2.2 million shares traded. I was just curious if you guys did an ASR or if there’s anything like that. I know you just talked about the sub-debt issuance. But if you can talk about that and then maybe also address the change in short interest during that period. It was a pretty big jump from kind of the 4% range to around 12 or 13%.

Martin Grunst: Yeah. Michael, if you look at the Q4 number, we did a portion of that share buyback in four kinda regular way. But as you noted, there a portion of that is related to ASR and that was done right in that early November time frame, which explains what you see.

Michael Rose: Okay. So I assume that was one with one of the institutional shareholders that owns your stock? Is that fair?

Martin Grunst: That’s generally not how you do ASRs.

Michael Rose: Got it. Okay. Maybe just moving on. You guys had really good deposit growth this quarter, especially in the IB category. Obviously, I understand the guidance. But can you talk about the competition for deposits and how we should think about, you know, not only growth, but the mix and deposit betas as we move through the, hopefully, two cuts this year?

Martin Grunst: Yes. So a couple of things about deposits. So just on of questions there. So competition, I’d say that the environment is, you know, it’s always competitive. It is today. It has been for a long time. But there’s nothing in particular that’s irrational in our markets that we’d point to. You know, it’s just sort of competitive at that high normal level. Growth this quarter, we felt very good about deposit growth all year long. I would just point out that a portion of the growth you saw in the fourth quarter was just the wholesale deposit that, you know, for odd reasons relating to the rate cuts, it just turned out there were some wholesale deposits available that were cheaper than the wholesale, you know, normal secured wholesale borrowing that we would use.

So we just replace that. So at some point, that washes out, and don’t be surprised if you see that happen in the first or second quarter when those spreads kind of go back to normal. But as you look forward into 2026, we expect to grow loans well. We expect to grow deposits well. The loan growth will probably exceed the deposit growth. That would be normal for us and given, you know, the loan-to-deposit ratio we have to start with. We’re very comfortable with that drifting up a little bit over the year. And then lastly, on deposit betas, we’ve had very good performance on deposit betas in the mid-60s here for deposit beta and upper seventies on interest-bearing liability beta, and those numbers are, you know, cumulative down beta cycle. And we expect that as we get into the rate cuts later in 2026 that we have performance right on top of that, we feel very comfortable with being able to continue with those levels for those cuts.

Michael Rose: Alright. Great. Thanks for taking my questions.

Martin Grunst: Yep. Thanks.

Operator: Your next question comes from the line of David Chiaverini with Jefferies. Your line is open.

David Chiaverini: Hi, thanks for taking the question. So wanted to ask about fee income. Clearly, very strong fees here. And the growth mid-single digit, excluding trading. Can you give some comments on what your expectations are on the trading front and drivers for overall fees?

Martin Grunst: So let me start here, and so I’d say that our intention here is to talk about both trading, the trading portfolio of businesses we expect mid-single digit in that. Really very long run rate, at times we’re above that. But that’s kinda how we see those businesses. And any given business can be a little higher or lower in a given year, but that’s how we see that portfolio. And that when I say that I’m including trading total trading revenue, which includes the NII and fees part, with the same expectation there that that will grow, you know, mid-single digit and certainly market opportunities where that could be notably higher. Let’s see. Anything you’d add?

Scott Grauer: Yeah. This is Scott. So I would say that in, you know, in addition to I think Marty frames it well at the top of the house. I think that what we’re seeing is a continuation of really the momentum that we built throughout ’25. We had a, you know, a good first month of ’25, and then the last two months of the first quarter were challenging for all the fixed income markets, and we stabilized after that. And I really think returned to more of our expected trend lines. In terms of our trading volumes, you know, activity. And we’ve continued to see the demand really coming from our financial and institution client base, as well as asset managers have kind of returned to more normalized demand, particularly in the mortgage-backed securities.

And then we’ve seen continued strength in the municipal sector as well. So I don’t think that, you know, if there’s anything, you know, extraordinary that occurred, but really more of a return to normalized levels of demand. And then the total revenue, as Marty articulated, both the fees and the NII out of that activity we feel pretty good about and feel constructive in terms of the trends that we’re seeing build back to our more normalized rates there.

David Chiaverini: Great. Thanks for that. And then shifting over to the expense side of things. Can you talk about the outlook? Looks really good on the efficiency side. With the guide of 63% to 64% versus the 65%. Can you talk about the drivers there? I know mortgage finance, you’re going to see some revenue catch up versus the expenses that came through in 2025, but you can you talk about that and other drivers of this strong efficiency outlook?

Martin Grunst: Yes. So you’re right. Part of that is just continued good momentum on the revenue side and then part of that relates to some work that we completed in Q3 and 2025. To make sure we’ve got our workforce and other expenses invested in the areas that we wanna have them invested in. And so as you go from Q4 to Q1, you’ll actually see some reduction in expense levels in the personnel line item as a result and the fee, you know, professional fees line item Q4 to Q1, we would expect, to see some benefit there as well.

Stacy Kymes: And I might just this is Stacy. I might just add on there a couple of points. I think number one, we think about things for the long term. We’re not focused on next quarter. And we’ve made several long-term investments over the last several years about how we think about growing the business. Certainly, the expansion in San Antonio was a big investment for us, the investment in mortgage finance was a big investment for us. And, obviously, you lead with expenses there, and it takes time for the revenue to catch up. And those investments to earn a return. Now beginning to do that, and so that’s gonna show up in the results. We have taken actions to try to manage that and demonstrate to the market that, look. We can manage these expenses, but we’re gonna invest, and as those investments mature, you’ll be able to see that efficiency ratio come back to a level you’re more accustomed to for us.

For us, given the mix of free revenue, we’re never gonna be a 55% efficiency ratio type company because of our high mix of fee businesses. But we do think that the guidance we provided is very reasonable for us. And I think you should expect us to achieve that unless given the disruption in the markets that we see, there may be some opportunities for us to continue to be aggressive in talent acquisition. And should that opportunity come to fruition, we may obviously choose to do that. Which may delay the kind of efficiency ratio falling. But based on what we see today, we’re very confident in our ability to let that efficient ratio evolve. But there could be some things that very opportunistically come about that would allow us to build a better even better revenue future.

And so we’ll we’re not gonna walk away from that. To manage the efficiency ratio.

David Chiaverini: Makes sense. Very helpful. Thank you.

Operator: Your next question comes from the line of Jon Arfstrom with RBC. Your line is open.

Jon Arfstrom: Hey, thanks. Good afternoon.

Stacy Kymes: Hey, Jon.

Jon Arfstrom: Couple of follow-ups here. Stacy, you talked about $100 million in balances from mortgage finance in the fourth quarter. What kind of a contribution do you expect from that business in 2026 in terms of balance sheet?

Stacy Kymes: You know, we think the number could be we could get to it easily get to, you know, a billion commitments by the ’26. Assume half of that’s funded. You know, probably do better than that, honestly. But I think that’s easy to assume. A lot of these things, they happen to kind of just take longer than you think that they will. By three to six months. And so I’m trying to be a little bit cautious there to, you know, don’t overpromise. But clearly, the trajectory there is very positive. The momentum that the sales team has is very, very strong. And we’re just exceptionally pleased with how that business is progressing for us.

Jon Arfstrom: Okay. Good. That helps, in terms of framing it. And then, Marty, for you, I asked you a similar question to this last quarter, but it seems like a decent setup for the margin for you. Do you expect the core margin to float higher? And can you share with us some of the repricing of the fixed-rate loans and securities and how that might flow through ’26?

Martin Grunst: You bet. Yeah. Yeah. And you’re right. We do continue to expect both margin and core margin will continue to expand into 2026. You know, fixed-rate repricing is certainly a big driver there. And so it’s about $700 million a quarter of securities portfolio that reprices up old rate to new rate. And as we go forward, that step up is, you know, not what it was a year ago, but think, you know, that’s maybe in the 60, 70, 75 basis point territory that rate step up. At least currently. And then fixed-rate loan book kinda similar story there, call it $200 million a quarter on average. And that’s probably more, you know, over a 100 basis points of rates step up as those occur. So that gives you a nice tailwind going into the year.

You know, the six basis points in core margin we saw this quarter, you know, there might be a little bit of a to the mean because that average has been more like 4.5 basis points. But, you know, we feel like that’s still that there’s legs to that driver there through 2026.

Stacy Kymes: K. This is Stacy. Just to kinda confirm too. I mean, you know, the actual rate movements don’t make a big difference to us. Maybe rounding around the fringes in our forecast or the guidance that we provided, these things are, you know, a couple of rate cuts that are in the, you know, back half of the year that don’t really make much of a difference. What does make a difference to us is the steepening yield curve as to all financial institutions. We’re not unique there. And so you are beginning to see, you know, really some steepness to the curve or actually some shape to the curve, maybe not steepness, but shape. And that’s certainly helpful to us and other financial institutions. As we think about 2026 and future periods as well. Because that builds over time. So that steepness would continue on.

Martin Grunst: Benefiting through 2027.

Jon Arfstrom: Plus.

Stacy Kymes: K. Seems like a good environment. So okay. Thank you for the help. I appreciate it.

Operator: Your next question comes from the line of Jared Shaw with Barclays. Line is open.

Jared Shaw: Hey, everybody. Good afternoon.

Stacy Kymes: Hey, Jared.

Jared Shaw: Hey, maybe just going back to the growth rate on fees and on the loan book. It feels like looking at what we’ve seen for the last three quarters that the guide for ’26 seems very conservative. Is there some area where maybe you’re expecting a little more pressure than we’re expecting? I mean, talking about 50% funded on $1 billion of commitments with mortgage warehouse. That’s one-third of the growth that you saw on the whole balance sheet this year. Where should we think that maybe there’s some pressure on growth?

Stacy Kymes: Well, I think upper single digits is, you know, like, could be seven to 9%. So I’m pretty confident in our ability to deliver that. I think that we wanna convey to the Street what we believe we can deliver. And certainly, we’ll do our very best to outperform that. But we think in this environment, particularly upper single-digit loan growth, is a very positive outlier and we’ll continue to I think we’re very well positioned. We’ve done a lot of work across lots of lines of businesses to be in a position to grow loans. You’ve seen that we’ve grown it at 11% clip over annualized over the last nine months. And that’s with some headwinds and some tailwinds from various areas. But I think that’s gonna continue, and that’s what we don’t know is, you know, will there be an unexpected headwind in, you know, an area that we can’t put our finger on today?

And so I think we can deliver, comfortably deliver the guidance that we provided, and hopefully, we can do better.

Jared Shaw: Okay. Alright. Thanks. Appreciate that. And then maybe shifting to the credit outlook. I mean, obviously, credit has been great, and you sound like things are the outlook remains strong. Just as you look at your model, what would drive any incremental concern on credit or which would have more of an impact on potential credit concerns? Would it be oil prices, tariffs, inflation, I guess, where are you keeping an eye out more closely?

Stacy Kymes: Yeah. You’re right. I mean, I get teased a lot here internally about saying that credit is unsustainably good, and it seems like it’s been that way for several years now. And certainly in the short term, we think it’s gonna stay that way. The biggest driver for provision levels going forward will be loan growth expected economic outlook. I mean, those will be the two things that will drive higher or lower provision levels. And as long as the economic outlook remains strong, we’re well positioned from an allowance perspective. And, you know, there will be a day that criticized and classified and nonperforming levels come up to a more normal level. You can see in the investor presentation kinda where we were essentially pre-COVID.

And we think that when it goes back to that level, it won’t be, you know, that credit’s going bad. It’s just going back to normal. But we don’t have some of the early indications that others may have, like don’t have low-end consumer and things like that that you’re beginning to see some weakness around. That’s not core to our portfolio. And so our portfolio is held in there very well. I think in the short term, it’s going to continue to do that. And there’s not just this easily identifiable thing that we think is the next thing to focus on there. But we have a great credit team, a very seasoned experienced team, and a great group of folks on the line who take risk management very responsibly. So we feel good about where we’re at there.

Jared Shaw: If we see sort of an unchanged economic backdrop from where we are today, and the loan growth that you’re expecting. Should we expect provisions in each quarter in ’26 but maybe potentially still some downward pressure on the allowance as a ratio or what’s the or you’re going have to provide for all loan growth from this point, and we should think about that ratio as stable from here?

Stacy Kymes: Yes. What I would go back to the guidance we provided. I’m not going to into quarterly what would happen or what could happen. We’ve given you an outlook a positive economic outlook a range of loan growth, and a range for provision levels next year, and that’s our best estimate today. You’ve seen how we’ve handled it over time, and so you can certainly provide your own color to that. But I’m not gonna get more specific than that.

Jared Shaw: Okay. Thanks.

Operator: Your next question comes from the line of Woody Lay with KBW. Your line is open.

Woody Lay: Hey, good afternoon, guys.

Stacy Kymes: Good afternoon.

Woody Lay: To start on the mortgage finance business. And longer term, it’s as that business continues to grow, how do you plan to fund that business? Will it be core deposit funded based on, you know, a low loan-to-deposit ratio, or as the volatility picks up, we’ll use broker deposits to help fund some of that?

Martin Grunst: Yeah. Woody, that loan portfolio, like any other loan portfolio, will be funded just by the broader funding mix, and you should expect that to largely look like it does today, where there’s a portion of that that’s wholesale, a portion of that that’s deposits. This business will bring with it a decent amount of deposits. But we’ve got a very strong funding profile, and this particular asset class is very liquid. So it gives us a lot of different alternatives to use, and we’ll just use the lowest cost, most sensible mix.

Woody Lay: Got it. That’s helpful. And then last for me, wanted to ask a follow-up on the trading business. You mentioned the outlook there is mid-single-digit growth. But there are market conditions that would support much stronger growth. Could you just remind me of the market dynamics out there that would support faster growth in your trading business?

Scott Grauer: Yes. So this is Scott. So obviously, as mortgage origination activity and volumes in the mortgage sector tend to add momentum and volumes in a declining rate environment. So this is one of those businesses that we enjoy real, you know, higher growth rates in challenging economic times that are spawning lower interest rates. So in a declining rate environment, where mortgage origination were to increase, that activity given our, you know, we’re fairly equal in terms of volumes and revenues from municipals and mortgage-backed securities. That mortgage-backed security, in particular, would benefit from lower rates. As would refinancing activity in the municipal space. So as rates decline, those two segments of our trading book are beneficiaries.

Stacy Kymes: The other thing I might add too there is a lot of our clients or other financial institutions and they’ve been reluctant to, if you will, take losses in their securities portfolio. So as those portfolios get closer to par and there’s fewer unrealized losses there, that’s gonna create a little bit more opportunity as well. We think, as we move forward.

Woody Lay: Got it. That’s really helpful. Thanks for taking my questions.

Operator: Your next question comes from the line of Ben Gerlinger with Citi. Your line is open.

Ben Gerlinger: Hey. Good afternoon.

Stacy Kymes: Hey, Ben.

Ben Gerlinger: I was curious if we could talk through a little bit on the expense. Why you is little bit myopic here, so I apologize. But you said March ’26. Is it fair to think, like, here to level set all these core items, it’s a little bit more of a mid-single digit? Going forward. I’m just trying to think about just underwriting the future given you guys have a faster pace of growth than the national average at this point.

Martin Grunst: Yeah. Just in Q3 and Q4, it was small, but there’s a little bit of period costs related to some of the realignment we did, but that’s not a material number in thinking about next year. But that is a little bit of a tailwind for us. From Q4 to Q1.

Ben Gerlinger: Gotcha. Okay. That’s helpful. And then in terms of just the mortgage kind of silo, I get that it’s relatively new you maybe you don’t have the perfect life at this point, but there’s like a ballooning effect to the mortgage business improved generally on a seasonality basis. Do you expect something similar where or is it such you’re starting at such a low base, it’s just kind of growth throughout and you have new customers adding and funding up their relative commitments. Like, should we expect it to kind of peak in the roughly July time frame and then kinda wane there or would you expect a little bit more linear growth throughout the year?

Stacy Kymes: Given we’re starting from essentially zero, I don’t think you’re gonna be able to see the effect of that. And I think you’re right. We see that somewhat intramonth as that business has natural ebbs and flows inside of it. But given our starting point here, I don’t think it’s gonna be discernible. It’s gonna look like just pretty strong expected largely linear growth throughout 2026.

Ben Gerlinger: Gotcha. If I can sneak one more in. Know the San Antonio expansion was it’s a pretty big lift for everyone involved. It seems we’re pretty successful at this point. Given the seasoning effects with the disruptions throughout. Kind of Texas, I should say, or even just this Texas area that every continuous state would you expect to do incremental hires to give you opportunity in front of you, or is it kind of a playbook that you’re you already wrote it and you were gonna write it here?

Stacy Kymes: No. I think you’re exactly right. I think that if you look back in our history, some of the highest periods of growth for us has when there’s been the most market dislocation. And M&A is highly disruptive. It’s disruptive to talent. It’s disruptive to clients. Who were forced to go through a conversion that wasn’t their choosing. And so our intention is to be aggressive and take advantage of that dislocation as much as we can. But I suspect we’re not the only ones with that strategy, and so that will be in a of itself a very competitive process. But we certainly expect in the markets where there have been significant M&A activity to be active from a talent acquisition and a customer prospect acquisition.

Ben Gerlinger: Sure. Appreciate the time, everyone.

Operator: Your next question comes from the line of Brett Rabatin with Hofty Group. Your line is open.

Brett Rabatin: Hey, good afternoon.

Stacy Kymes: Hey, Brett.

Brett Rabatin: Wanted to go back to the NII guide for the full year. Just given the comments on the margin, it seems like the guidance that you’re giving would imply a similar like, low single-digit growth of average earning assets. 26 relative to the high single-digit growth of loans. Know, is that fair? And then you talked some about the various borrowing pieces that you can use on the funding side. You know, do you end up reducing that throughout the year as a result?

Martin Grunst: Yes. So you’re right. You’ll the blend of fairly stable securities portfolio and good growth in the loan book will blend out to a lower earning asset growth, but combined with a little bit of margin expansion, that’s how you get to the number. And we expect deposits to grow to support overall margin but we also expect to see the loan growth be a little faster than the deposit growth.

Brett Rabatin: Okay. And you guys have talked quite a bit on this call about the fee income guidance, you know, and the, obviously, brokers and trading is hard to predict at best. You know, and it’s depending on rates to a large degree. You know, I’m a little bit surprised the mid-single guide seems reasonable for some of the businesses. You know? But I’m just curious if you just feel like maybe the growth in what you’ve accomplished, which is huge on the asset management side, if maybe that’s tough to continue to replicate or if there’s anything else that’s driving maybe a more sedate growth level than what you’ve experienced the past two quarters in particular?

Martin Grunst: Well, two things. Keep in mind well, number one, you’re right. That business we feel great about, and that should have a good long very long-term growth rate. But note that within that fee guide that there is a shift from fee income into net interest income just within trading just based on the curve slope of this. So don’t let that confuse our enthusiasm for fee-based businesses.

Stacy Kymes: The other piece that you may be missing is remember in Marty’s prepared remarks, he talked about $23.5 million kind of onetime gain. That’s included in the 2025 fee number, essentially. So if you think about that, x that number, I think that probably gets you to a little bit higher number than what you see on the surface. But Marty alluded to that in his prepared remarks.

Brett Rabatin: Okay. And, Marty, would you be willing to throw out a number for the movement from the income to NII guide on the brokerage trading?

Martin Grunst: You know, that’s maybe a little bit more into the weeds, than is constructive, but, you know, it’s not small. And when you look at the other large banks that have trading, they’re doing the same exact sort of guide for the same exact reason.

Brett Rabatin: Okay. And I don’t know if I’m last. The other question I really wanted to ask was just around you guys have been growing Texas in particular and Oklahoma really well. Arizona had a good 25, but it seems like Colorado and Kansas, Missouri have been lagging. Any thoughts on those two states or three states and those markets and, you know, if there are competitive dynamics that are flowing stronger growth or anything else you might comment on that?

Stacy Kymes: No. Obviously, we’re excited about the growth areas that you mentioned. I mean, Oklahoma, Texas, and Arizona, you highlighted. Those were all great stories for 2026. Still very excited about Colorado and Kansas City. That’s the great thing about our business lines and about our geography is that they’re not all linear at the same point, but the diversity is what creates growth over time. And so we’re as excited about those markets as we are any of the other ones. That we’re in. There’s nothing necessarily unique about those that creates a different growth dynamic there. From my perspective.

Brett Rabatin: Okay. Fair enough. Appreciate all the color.

Operator: Your final question comes from Matt Olney with Stephens. Your line is open.

Matt Olney: Yes. Hey, guys. Just a few follow-ups here. Going back to Stacy’s comments about the importance of the steepness of the curve, can we assume that the guidance implies about a 50 basis point improvement throughout the year? So shorting comes down 50 bps from the intermediate part of the curves maintains kinda where it’s at today.

Martin Grunst: Yeah. That’s more or less what forwards have, and that’s basically how we think about the year.

Matt Olney: Okay. Thank you for that, Marty. And then on the capital discussion, it sounds like there aren’t any specific targets target ratios out there you wanna disclose. I think we’re all just trying to understand if there could be additional deployment activity or for 2026, whether it’s buyback, M&A, or something. Or something else. So he just addressed if you see any interest in capital deployment opportunities for the year.

Stacy Kymes: This is Stacy. I think, you know, look, our kinda order generally has been our first choice is loan growth. Loan growth has been very good. Second choice is looking at M&A opportunities as they come along. Opportunistic there. We’re not interested in doing something just for the sport of doing it. It needs to add intrinsic strategic value as well in being financially beneficial to shareholders. We don’t see anything today on the near-term horizon that would indicate that that’s a near-term deployment of capital. And obviously, you saw us be more aggressive in the fourth quarter with share repurchases. Likely to slow that down here as we get into 2026. Yeah. I think that’s the use of the capital for us. So we’re kinda not locked into any one favored, and we can pivot and be more aggressive as we have a view over time.

And we’re still active. We’re looking for ways to deploy capital from an M&A perspective. But as you know, we kinda don’t act like capital is burning a hole in our pocket. We’re not afraid to sit on it and wait to find an opportunistic time to redeploy it. That’s proven to be a good strategy for us over time.

Matt Olney: Yeah. Okay. That’s helpful, Stacy. And then just lastly, the loan yields in the fourth quarter, I thought, were better than I was expecting. Anything unusual on those loan yields in the fourth quarter? And then any commentary about just loan beta expectations within that guidance in 2026?

Martin Grunst: Yes. Really nothing that’s a change fundamentally in that portfolio as you know, it’s very much a floating rate portfolio and very much a one-month floater portfolio. And so, you know, there’s nothing that would change the characteristics to make it behave any differently. And that’s all captured in how we constructed the margin guidance.

Stacy Kymes: The one thing I would say there, Matt, is as you know, and we talked about earlier on the call, SOFR most of those loans are SOFR based. So there’s been a little bit of quirkiness with SOFR. That remains. And so, you know, they’ve benefited just a little bit from that. But that’s really it.

Martin Grunst: Yeah. That kinda flows through to a basis point or maybe two for the quarter.

Matt Olney: Okay. That’s helpful, guys. Thanks again.

Operator: Thank you. With no further questions in queue, I’d like to turn the conference back over to Stacy Kymes for any closing remarks.

Stacy Kymes: As I’ve highlighted today, broad-based growth has been a defining thing for the quarter and for the year. It reflects the disciplined work we’ve undertaken over many years to strengthen our foundation, diversify our earnings stream, and consistently deliver results across the business. BOK Financial is a strong, stable, growing company. Our progress has positioned us well to navigate the current environment, capitalize on market disruption, and continue generating long-term value for our shareholders. Appreciate your interest in BOK Financial and your willingness to spend time with us this afternoon. Please reach out to Heather King if you have any additional questions at h.King@bokf.com.

Operator: This concludes today’s conference call. You may now disconnect.