BOK Financial (NASDAQ:BOKF) reported third-quarter 2026 net income of $159.9 million, or $2.64 per diluted share, as loan growth and net interest margin expansion helped offset pressure on market-sensitive fee businesses caused by rising long-term interest rates.
Chief Executive Officer Stacy Kymes said the company’s results were supported by “quality loan growth,” margin expansion, expense discipline and strong credit performance. Total loans increased $646 million, or 2.4%, from the prior quarter and 11.5% from a year earlier.
Loan growth led by energy, mortgage warehouse and CRE
BOK Financial’s energy loan portfolio increased $264 million, or 8.6%, during the quarter, driven by increased utilization among existing clients and new loan production. Kymes said the company had benefited as activity in the energy sector normalized following elevated payoff activity last year associated with industry consolidation and favorable debt capital markets.
Commercial real estate loans rose 4.2% sequentially, with growth across industrial, retail and other property lending. Kymes said the company remained below its internal CRE concentration limits and continued to emphasize recourse lending. He noted that higher long-term rates could affect paydowns and make some loans “a little stickier,” potentially supporting portfolio growth.
Mortgage warehouse balances increased $137 million to $589 million, while active warehouse commitments rose by more than $500 million to $1.4 billion. Loans funded through warehouse lines grew 23%. Kymes said the business was still relatively early in its development, with utilization in the low 30% range and potential to move closer to 50% as client relationships mature.
The company’s core commercial and industrial portfolio was slightly higher sequentially and up 10.9% year over year. Healthcare loans fell 1.4% during the quarter but remained 3.8% above the prior-year level. Kymes said BOK Financial had not yet seen higher rates materially affect loan demand in its markets and continued to expect loan growth above 10% for the full year.
Margin expands as securities reprice
Net interest income increased $18.1 million from the second quarter, while net interest margin expanded nine basis points to 3.0%. Excluding trading activity, core net interest income rose $15.1 million and core margin increased eight basis points.
Chief Financial Officer Marty Grunst said loan growth and the repricing of fixed-rate assets drove the improvement. The company’s relatively short-duration securities portfolio provides $600 million to $700 million of quarterly cash flows available for reinvestment, he said. During the third quarter, $770 million of securities ran off at an average yield of about 3.3% and were reinvested at an average yield slightly above 5.1%.
Grunst said management expects net interest margin to remain stable in the near term, while fixed-rate asset repricing remains a positive driver. He also cited competitive loan and deposit pricing as a potential offset. Kymes added that while the company is broadly rate-neutral, changes in the yield curve’s shape can influence results.
Deposits declined on an ending-balance basis during the quarter, but Grunst said average deposit balances and end-of-quarter balances were largely consistent. Average balances increased across every disclosed line of business, he said, describing the underlying deposit trend as growth rather than deterioration.
Fee income declines as rates pressure trading and mortgages
Total fees and commissions were $188 million, down $14 million sequentially. Markets and securities revenue declined $15.2 million to $36.2 million as the 10-year Treasury yield rose nearly 80 basis points during the quarter.
Total trading revenue, including both trading fees and trading-related net interest income, was $15 million, compared with $25 million in the prior quarter. Trading fees were negative $6.3 million, while trading-related net interest income was $21.3 million.
Executive Vice President of Wealth Management Scott Grauer said rapidly rising rates reduced mortgage origination activity and challenged fixed-income markets. He said the trading business needed “stability and acclimation” in rates rather than lower absolute rate levels to return to more favorable conditions. Kymes said the pace of rate changes had moderated in the early weeks of October, supporting management’s view that trading activity could stabilize.
Investment banking revenue increased $4.3 million, driven by municipal bond underwriting, while syndication fees declined $3.4 million after a strong second quarter. Fiduciary and asset management revenue totaled $69.9 million, with assets under management and administration stable at $129.3 billion. Transaction card revenue reached a quarterly record of $32.2 million.
Credit metrics remain low; full-year outlook maintained
Nonperforming assets not guaranteed by the U.S. government increased $3.3 million to $58 million, or 21 basis points of period-end loans and repossessed assets. Net charge-offs were $886,000, and the company’s combined allowance for credit losses was $322 million, or 1.16% of outstanding loans.
Management recorded no provision for credit losses in the quarter, as improved economic forecast assumptions offset the impact of loan growth. Grunst said BOK Financial expects full-year 2026 provision expense to be below $10 million.
Total expenses were largely unchanged from the prior quarter. Personnel expenses, excluding deferred compensation changes, increased $6.5 million because of talent investments, production-related incentive compensation and higher healthcare costs. The company tightened its full-year expense-growth outlook to roughly 1% from the prior year and expects an efficiency ratio of about 62%, or near 63% excluding the second-quarter Visa gain.
For 2026, BOK Financial maintained its forecast for loan growth above 10% and total revenue growth in the mid-single digits. The company expects net interest income of $1.43 billion to $1.44 billion and fee income exceeding $800 million, assuming one additional rate hike in the fourth quarter and long-term rates consistent with the current forward curve.
About BOK Financial (NASDAQ:BOKF)
BOK Financial Corporation is a financial services holding company headquartered in Tulsa, Oklahoma. Through its banking and financial-services subsidiaries, the company serves businesses, institutions, individuals and families across the central and southwestern United States.
The company provides commercial banking, consumer banking, wealth management and capital markets services. Its offerings include deposit accounts, commercial and consumer loans, treasury and cash-management services, investment management, trust and private banking, mortgage lending, investment banking, securities brokerage and institutional trading.
BOK Financial operates under banking brands including Bank of Oklahoma, Bank of Texas and Bank of Albuquerque, with additional operations serving customers in Colorado, Kansas, Missouri and Arkansas.
