BOK Financial's third-quarter profit fell slightly as higher legal and other costs offset growth in loans and fee income.

Net income was $74.2 million, down almost 1% from a year earlier, the $32.8 billion-asset company in Tulsa, Okla., said Wednesday.

Net interest income rose 5.2% to $187.8 million as the net interest margin widened to 2.64% from 2.61% and total loans grew nearly 7% to $16.5 billion.

Loan growth was "a bit softer than expected" because of "one significant paydown in the energy portfolio," Chief Executive Steve Bradshaw said in a news release. "We continue to forecast mid-single-digit annual loan growth for the foreseeable future."

Income from fees and commissions rose 12.5% to $185.3 million, but operating and credit costs rose at a faster rate.

Operating costs rose 16.7% to $262 million. One of the reasons for the increase in costs was a $7.8 million legal settlement related to "the manner in which the company posted charges to certain deposit accounts;" BOK booked $5 million of the settlement in the third quarter.

Personnel and other costs rose, too. BOK expects to lower its expenses next year by scaling back its contractors and not filling some jobs that are open, Bradshaw said.

Moreover, the provision for loan losses rose 33% from a year earlier, to $10 million.

Still, BOK showed some positive credit-quality signs. The $10 million provision was half the size of the set-aside in the second quarter and less than 30% of the first-quarter set-aside.

Those decreases "reflects improvement in credit metrics over the previous quarter, largely driven by energy price stability and decreased rates of newly identified nonaccruing and potential problem loans," the company said in a news release. BOK reported $361 million of "potential problem energy loans."

Despite any concerns the banking industry might still have when it comes to energy, BOK's chief credit officer, Marc Maun, said the "energy banking team booked $200 million of new commitments to high-quality borrowers."

"If oil and natural gas prices remain in recent ranges, we expect the positive trends to continue in the fourth quarter," Maun said in the news release.

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