BOK Financial continued to diversify its lending, booking strong increases in health care, manufacturing and commercial real estate credits. Progress on that front, however, was overshadowed by ongoing deterioration in its energy portfolio.
The $31.4 billion-asset company reported first-quarter net income of $42.6 million, down 43% last year's first quarter. BOK, which announced its results Wednesday, blamed the drop-off on a number of headwinds, but energy was by far the most severe.
The Tulsa, Okla., company charged off $24 million of loans, the lion's share being energy-sector credits. It also recorded a $35 million provision for loan losses in response to a $273 million increase in potential problem energy loans. By contrast, in the first quarter of 2015, chargeoffs totaled $2.2 million and there was no provision for loan losses.
At the end of the quarter, BOK's allowance for loan losses totaled $233.2 million, or 1.45% of total loans.
President and Chief Executive Steven G. Bradshaw focused on the positive, noting a 9% increase in pre-provision net interest income, powered by a 9% year-over-year increase in loans, to $16 billion. Growth in the health care portfolio was exceptionally strong. Health care loans rose 32% to $2 billion.
While first-quarter noninterest income was flat at $168 million, the jump in problem loans led to a $1.9 million increase in deposit-insurance costs. Personnel expenses rose 6% to $135.8 million. Overall, noninterest expenses totaled $245 million, up 12% year over year.