Company: BOKF
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000875357-25-000027
Chunk: 4

Company: BOK FINANCIAL CORP
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 2
Chunk 4
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31, 2024.

1 See Explanation and Reconciliation of Non-GAAP Measures in "Non-GAAP Measures" section following.

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Results of Operations

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on debt securities, loans, and other interest-earning assets less interest paid for interest-bearing deposits and other borrowings. The net interest margin is calculated by dividing tax-equivalent net interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is typically greater than net interest spread due to interest revenue earned on assets funded by non-interest bearing liabilities such as demand deposits and equity.

Tax-equivalent net interest income totaled $318.8 million for the first quarter of 2025, compared to $315.5 million for the prior quarter. Net interest income increased $6.8 million from changes in interest rates and decreased $3.6 million from changes in earning assets. Table 1 shows the effect on net interest income from changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities.

Average earning assets increased $231 million over the fourth quarter of 2024. The average balance of trading securities increased $245 million. Average loan balances increased $44 million due to growth in commercial real estate loans and loans to individuals, largely offset by a decrease in commercial loan balances.

Total average deposits increased $540 million over the fourth quarter of 2024, including a $762 million increase in interest-bearing deposits, partially offset by a $222 million decrease in demand deposits. Funds purchased and repurchase agreements decreased $141 million while other borrowings increased $137 million.

Net interest margin was 2.78% compared to 2.75% in the fourth quarter of 2024, primarily due to liabilities re-pricing lower more quickly than assets during the quarter. For the first quarter of 2025, our core net interest margin excluding trading activities1, a non-GAAP measure, was 3.05% compared to 3.09% in the prior quarter. The tax-equivalent yield on earning assets was 5.45%, a decrease of 14 basis points. Loan yields decreased 30 basis points to 6.71% as the majority of our portfolio is floating rate and realized a full quarter impact of the fed funds rate cuts in the latter half of 2024. The yield on trading securities was up