CFR Cullen Frost Bankers Inc

We have reiterated our Neutral recommendation on BOK Financial Corporation (BOKF) following a detailed analysis of the company’s fourth quarter and full year financial results in light of the current economic environment.

BOK Financial’s fourth-quarter 2011 earnings came in at 98 cents per share, below the Zacks Consensus Estimate by 12 cents. Results were, however, above 86 cents earned per share in the prior-year quarter, but below the prior quarter's earnings of $1.24.

The earnings results primarily reflect a decrease in net interest revenue and lower fees and commissions sequentially, thereby resulting in reduced top-line growth. However, these negatives were partially offset by decreased operating expenses. Moreover, improved credit quality and growth in loans and deposits were also positives for the quarter.

For full-year 2011, net income was $285.9 million or $4.17 per share, up 16% year over year. However, the reported full-year earnings lagged the Zacks Consensus Estimate of $4.32.

The strategic expansions and local-leadership-based business model of BOK Financial, which has peers such as Cullen/Frost Bankers Inc. (CFR) and First Financial Bankshares Inc. (FFIN), have aided its growth as a leading financial service provider from a small bank in Oklahoma.

BOK Financial’s diverse revenue stream, sturdy capital position and expense control initiatives augur well for investors. The dividend hike will also bode well and boost investors’ confidence.

Yet, with protracted economic recovery, we expect revenue growth to be restricted. Furthermore, we remain concerned about the regulatory issues and the margin pressure resulting from a highly liquid balance sheet.

Hence, the risk/reward profile remains balanced for BOK Financial and we have a Neutral recommendation on the stock.

The shares of BOK Financial currently retain a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.

 
BOK FINL CORP (BOKF): Free Stock Analysis Report
 
CULLEN FROST BK (CFR): Free Stock Analysis Report
 
FIRST FIN BK-TX (FFIN): Free Stock Analysis Report
 
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