BOK Financial Corporation

Greetings. Welcome to BOK Financial Corporation's first quarter 2024 earnings conference call. As a reminder, this call is being recorded, and I would now like to turn the presentation over to Heather Worley, Director of Investor Relations for BOK Financial Corporation. Please proceed.

Good morning, and thank you for joining us to discuss BOK Financial's first quarter 2024 financial results. Our CEO, Stacy Kimes, will provide opening comments. Mark Maughan, Executive Vice President for Regional Banking, will cover our loan portfolio and related credit metrics. And Scott Brower, Executive Vice President of Wealth Management, will cover our fee-based results. Our CFO, Marty Gruntz, will then discuss financial performance for the quarter and our forward guidance. The slide presentation and press release are available on our website at BOKS.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 Kynes, who will begin on slide four.

Thank you, Heather. We're excited to welcome Heather to our team. We're pleased to report earnings in the first quarter of $83.7 million, or EPS of $1.29 per diluted share. Adjusting for notable items, such as AFS repositioning and FDIC special assessment, Net income would have been $123.2 million, and EPS would have been $1.91 per share. Before I discuss the highlights from the first quarter, I would like to talk about our strategy. At BOKF, our approach is based on the long term. We are focused on driving profitability and performance that creates sustainable value for our shareholders. BOK Financial is a full-service financial services company with a diversified loan portfolio. unwavering discipline and credit quality, top-tier fee income businesses that produce attractive returns, and a solid core deposit franchise. Our footprint is located in dynamic, high-growth markets, and our strong risk management culture allows us to remain open for business, actively growing our portfolio during times when others are pulling back. We have a seasoned management team with deep bench strength. Our executive leadership team has an average of 34 years of industry experience, and 24 years at this organization. Through market cycles, we consistently invest in our company's growth. Our ample levels of capital and liquidity allow us to expand client relationships and take market share when others pull back. A clear example of this is our investment in the San Antonio market, which is progressing more favorably than anticipated. We've now added 13 employees in that market and are already seeing meaningful new business generation. As a further part of our expansion in Central Texas, we also have 12 wealth employees and seven mortgage employees in the Austin market. We also added 13 team members for our institutional sales team with our Memphis expansion, which will complement our existing fixed income trading activities. Talent acquisition is a fundamental part of our strategy. We proactively recruit for our future knowing that our greatest asset is our people. I'm thrilled to announce that we were recognized as one of only 60 organizations to receive the 2024 Gallup Exceptional Workplace Award. This is independent validation of our culture of inspiration, ambition, collaboration, and tenacity. Discipline is key to generating value, and one differentiator I wanted to highlight for us is our credit culture. If you look back to the great financial crisis, while our credit costs were well above our own average, we materially outperformed our peers. This and our holistic risk management focus contributed to us being the largest traditional bank not to participate in TARP. Industry-wide credit costs have been very low over the last several years, but with growing concerns in the regional banking space, there is renewed focus on credit and particularly commercial real estate. We never lost sight of managing credit prudently and believe this is an area where we will continue to outperform on a relative basis. We have maintained the same credit standards with a consistent credit management team that led to better credit losses versus peers historically. We've added a slide to our presentation that shows our historical credit performance by line of business to highlight our impressive long-term performance. Combining strong historical credit performance with an ongoing commitment around concentration limits should give investors further confidence in our ability to perform well in this area moving forward. We have a commercial real estate concentration limit of 185% of total commitments versus Tier 1 capital and reserves. And today, we have approximately 22% of outstanding balances in commercial real estate. Over the years, we have focused on growing our specialty lines of business, like energy and healthcare, which has increased our core commercial and industrial relationships. We've made investments in our core commercial businesses over the last several years, and we see those returns evident in the first quarter with 9% annualized growth in commercial loans. Another way you see us taking the long view is in the retention of our Visa Class B stock. Many have fully monetized their shares since 2008 at a considerable discount. We held onto this position and now expect to receive full value for the shares we hold. Moving to slide five, period and loan balances increased $268 million, or 1% in the quarter. with growth driven by commercial loans, and our teams remain confident in our pipelines as we move forward. Both period end and average deposits continue to grow this quarter. Our loan to deposit ratio declined slightly to 68%, remaining well below our peers and providing significant on-balance sheet liquidity to meet future loan or other liquidity demands. We have now seen two consecutive quarters with a slowing pace of net interest margin declines, and we believe we are at the trough. Our credit remains very strong, and we have a combined reserve of $329 million, or 1.36% of outstanding loans a quarter in, which is above the median of our peer group. Finally, we repurchased over 616,000 shares this quarter to reflect our long-term confidence in the company and to take advantage of attractive repurchase valuations. I'm proud of the quarter that this team has put together and appreciate the time to review it with you this morning. With that, I'll turn the call over to Mark.