BOK Financial Gains 16% in 3 Months: How to Play the Stock Now?

BOK Financial Corporation BOKF shares have gained 16% in the past three months, outperforming the industry’s growth of 9.2%. Meanwhile, BOKF peers Cullen/Frost Bankers, Inc. CFR and First Horizon Corporation FHN have risen 1.9% and 16.9%, respectively. 

Price Performance

However, after such a significant rally, the question on every investor's mind is whether they should buy the BOKF stock now or wait for a better entry point. Let us find out.

Factors Likely to Drive BOKF Stock

Organic Growth: BOK Financial has been witnessing continuous loan growth on a diverse business model and an increase in loans to individuals. It has been focused on diversifying its loan portfolio to energy, healthcare and service lending. Though loans declined in 2021 and the first half of 2025, the metric witnessed a compound annual growth rate (CAGR) of 2% in the last six years (2018-2024).  Further, deposits have shown a rising trend, seeing a CAGR of 7.1% for the same time frame. This trend continues to increase in the first half of 2025. Given the strong loan pipeline and deposit balance, the company is well-poised for organic growth.

Fed’s Rate Cut to Net Interest Income (NII): BOK Financial’s NII witnessed a four-year CAGR of 2.8% (ended 2024). However, the trend reversed in the first half of 2025. Further, the net interest margin (NIM) decreased to 2.75% in 2024 from 2.93% in 2023 and 2.98% in 2022 due to deposit repricing. Nevertheless, the margin showed modest expansion in the first half of 2025, reflecting easing funding costs and improved asset yields. 

With the Federal Reserve expected to resume interest rate cuts later this month, its NII and NIM will expand further. Management expects NII to be $1.33-$1.38 billion in 2025, suggesting a rise from the $1.2 billion recorded in 2024.

Strong Asset Quality: Improved asset quality trends at BOK Financial seem to be encouraging, as credit quality metrics remain better than the pre-pandemic levels. The company has been witnessing a sharp decline in its non-performing assets, seeing a five-year (ended 2024) negative CAGR of 24.6%. This trend continued in the first half of 2025. Likewise, net charge-offs (NCOs) witnessed a negative CAGR of 40.9% during the same period. The metric also declined in the first half of 2025. With a history of outperformance during credit cycles, BOK Financial is believed to be well-positioned amid expectations of an economic slowdown. Management expects 2025 Provisions to remain below the $18 million recorded in 2024.

Impressive Capital Distribution: BOK Financial has a steady capital distribution plan in place. The company has been hiking dividends every year. It hiked its dividend 3.6% to 57 cents per share in October 2024. It has increased its dividend five times over the past five years. The company currently has a dividend yield of 2.07%. Its peers, First Horizon, has a dividend yield of 2.65%, whereas Cullen Frost has a dividend yield of 3.17%.  

BOK Financial Corporation Dividend Yield (TTM)

BOK Financial Corporation dividend-yield-ttm | BOK Financial Corporation Quote

On July 29, 2025, the board approved a repurchase authorization of up to 5 million shares, replacing the November 2022 program. As of June 30, 2025, 0.87 million shares remained available. Given the favorable payout ratio and earnings strength, such capital distribution activities seem sustainable.

Few Concerns Prevail for BOK Financial

Rising Expenses: BOKF has been witnessing a steady rise in expenses. Operating expenses witnessed a CAGR of 3.4% over the last six years (2018-2024). In the first half of 2025, the rising trend continued. The expense base is expected to remain elevated due to its ongoing investments in technological advancements and an increase in employee-based compensation. In 2025, non-interest expenses (excluding FDIC special assessment) are likely to increase at a mid-single-digit rate from $1.37 billion in 2024. FHN expenses are projected to remain flat or rise 2% from the 2024 reported level. CFR’s non-interest expenses are projected to rise in the high-single digit in 2025.

Loan Concentration: The majority of BOK Financial’s loan portfolio comprises total commercial loans, which accounted for 59.2% of the total loans as of June 30, 2025. The rapidly changing macroeconomic backdrop is affecting commercial lending activity and the asset quality of the loan category. Thus, the lack of loan portfolio diversification is likely to hurt its financial situation if the economic situation worsens.

How to Play BOKF Stock Now?

The company’s strong fundamentals, including steady loan and deposit growth, improving net interest margins and high-quality assets, position it well for continued expansion. Its solid capital base and consistent dividend policy further enhance shareholder confidence. 

For 2025 and 2026, its earnings and revenues are expected to increase year over year.

Sales Estimates

Earnings Estimates

However, rising operating expenses and significant reliance on commercial loans pose risks, particularly if economic conditions weaken. Given these factors, BOKF is best viewed as a hold at current levels, allowing investors to benefit from ongoing organic growth and dividend income while waiting for a potentially more attractive entry point.

BOKF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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