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BOK Financial's net income drops in Q1'16

Tulsa,Okla.-based BOK Financial Corp.on April 27 reported first-quarter net income attributable to shareholders of$42.6 million, or 64 cents per share, down from $74.8 million, or per share, for the firstquarter of 2015.

TheS&P Capital IQ consensus estimate for normalized EPS was 97 cents for therecent quarter.

"We earned $43 million in the first quarter despite a numberof challenges including a higher loan loss provision necessitated by theextended commodities downturn and its impact on our energy loan portfolio,"President and CEO Steven Bradshaw said in the company's earnings release.

Bradshaw added that a significant decrease in primarymortgage interest rates during the quarter resulted in a higher-than-expectednet decrease in the fair value of the company's mortgage servicing right asset.Expenses were also elevated due to a number of noteworthy items in the quarterincluding accruals for legal matters, higher deposit insurance expense, and apurchase accounting adjustment in one of the company's merchant bankinginvestments.

BOKFinancial recorded a provision for credit losses of $35.0 million for the firstquarter, compared to $22.5million for the previous quarter. Net loans charged off totaled$22.5 million in the first quarter, up from $3.0 million in the linked quarter.

"Weexpect total loan loss provision for the full year at the high end of our$60 to $80 million guidance range,with the majority of this expected in the first half of the year," StacyKymes, executive vice president of corporate banking, said in the earningsrelease. "This is due to continued credit migration in the energyportfolio, as anticipated."

Kymesalso noted that while the company's loan growth was "muted" in thefirst quarter, BOK Financial continues to have strong new business developmentpipelines and its targeted loan growth of mid-single digits for the full yearremains achievable.

Thecompany's net interest margin for first quarter was 2.65%, compared to 2.64% inthe linked quarter and 2.55% in the first quarter of 2015.Nonperforming assets totaled $349.3 million at March 31, 2016, compared to$251.9 million at Dec. 31, 2015, and $206.6 million at March 31, 2015.