BOK Financial’s Interest Margin Recovery Gained Pace

The Tip Desk · October 21, 2026 · 3 min read

BOK Financial’s third-quarter net interest margin expanded 9 bps to 3.00%, while higher rates weighed on trading and mortgage revenue.

BOK Financial (BOKF), a banking and wealth-management company, widened its net interest margin recovery in the third quarter. Margin expanded 9 bps, following a 1-bp improvement in the second quarter, and net interest income recorded a larger sequential increase despite slower loan growth.

Net interest income rose $18.1 million to $370.0 million, compared with a $9.3 million increase in the second quarter. The company attributed the improvement in income and margin to loan growth and fixed-rate asset repricing. Its core margin excluding trading activities, a non-GAAP measure, increased 8 bps to 3.21%.

Asset yields outpaced funding costs. The yield on average earning assets increased 10 bps to 5.37%, while the cost of interest-bearing deposits increased 3 bps to 2.70%.

Period-end loans rose 2.4% QoQ to $27.7 billion, led by energy, industrial-property and mortgage-finance lending. Average loans increased 1.7% QoQ to $27.2 billion. The $468 million sequential increase was smaller than the second quarter’s $844 million gain.

Deposit growth did not match lending on a period-end basis. Deposits fell 0.8% QoQ to $39.5 billion, although average deposits rose 0.8% QoQ. The loan-to-deposit ratio increased to 70% from 68%.

The improvement in interest income coincided with another decline in fees and commissions, which fell to $188.0 million from $202.0 million. Brokerage and trading revenue accounted for most of the reduction, dropping $13.0 million to $19.5 million. BOK attributed that decline to an unfavorable rate environment and lower fixed-income trading volumes.

Mortgage banking revenue fell to $16.7 million. The company said rising mortgage rates reduced production volume and spreads. Fiduciary and asset-management revenue totaled $69.9 million; BOK said the sequential decline reflected seasonal tax-preparation fees in the second quarter and that revenue increased when those fees were excluded.

The trading weakness reached Wealth Management, where pretax income fell $6.1 million to $28.8 million. BOK attributed a $9.9 million reduction in trading revenue to the rate environment and lower fixed-income volumes. Higher municipal underwriting and financial-advisory fees partly offset that decline.

Commercial Banking generated $140.7 million in pretax income, down $5.4 million sequentially. BOK said lower loan-syndication fees reduced investment-banking revenue, while increased loan volumes lifted net interest income. Consumer Banking contributed $14.5 million in pretax income, which the company described as largely unchanged.

Reported net income declined to $159.9 million, or $2.64 a share, from $176.5 million. BOK said second-quarter profit would have been $156.5 million excluding the Visa share-exchange gain and securities-repositioning loss. Operating expense was broadly stable at $360.7 million, but increased $6.4 million excluding deferred compensation, with the company citing investment in personnel among the drivers.

Credit deterioration remained limited in the reported measures. Nonperforming assets increased to $67 million, with their ratio rising 1 bp to 0.24% of loans and repossessed assets. Net charge-offs were $886 thousand, or 1 bp of average loans annualized. BOK recorded no credit-loss provision, saying improved economic assumptions offset the effect of loan growth.

Capital ratios declined. Tangible common equity fell to 9.16% from 9.61%, while net unrealized losses on available-for-sale securities widened to $650 million from $256 million. BOK made no share repurchases. Its common equity Tier 1 ratio ended September at 12.73%, against a 7.00% minimum including the capital-conservation buffer.