Q4 2024 BOK Financial Corp Earnings Call

Marc Maun

Thanks, Stacy.
Turning to slide 7. Period end loan balances increased 0.5% linked quarter. Commercial loan balances grew 1% and loans to individuals were up 2.7% while commercial real estate balances fell 2.5%. We continue to grow new commitments and relationships and believe that economic conditions in our markets are supportive of continued growth. With our balance sheet, capital and credit quality metrics, we are well-positioned to take advantage of these conditions and are actively pursuing new loan opportunities.
Portfolio yields decreased 46 basis points during the quarter as our predominantly floating rate loan portfolio repriced lower following the recent federal funds rate cuts. Loan balances in the energy business increased 4.1% linked quarter, reflecting fund ups of existing lines and an increase in new relationships.
Our core C&I loans grew 2.7% linked quarter, primarily in Texas resulting from our increased investment in this market. These segments continue to produce strong growth being up 8.1% on a year over year basis with loan pipelines remaining stable. I know Stacy referenced this in his opening remarks, but this story is exciting enough that it bears repeating.
Our healthcare business loans decreased 4.4% linked quarter. While new loan production and pipelines remain robust, we have continued to see payoff activity into the fixed rate HUD market. Our CRE business decreased 2.5% quarter over quarter. CRE loans were down in Q4 as part of the normal cycle of refinancing completed projects on a long-term basis. We continue to add new loans in the early construction phase, and we’ll be funding up over time creating new loan growth. Loans to individuals increased 2.7%, reflecting growth in both personal loans and residential mortgage loans.
Transitioning to slide 8. Credit quality remains exceptional across the loan portfolio extending our trend of outperformance versus peers in this area. NPAs not guaranteed by the US government fell again this quarter, decreasing $38 million to $42 million, the lowest levels we’ve seen in the last 20 years. The resulting nonperforming assets to period end loans and repossessed assets decreased 16 basis points to 18 basis points. Committed/criticized assets remained very low relative to historical standards.
In addition, we had minimal net charge offs of $528,000during the quarter and net charge offs have averaged 5 basis points over the last 12 months. We expect net charge offs to remain below historical norms going forward. We are well reserved with combined allowance for credit losses of $332 million or 1.38% of outstanding loans.
And now, I’ll turn the call over to Scott.

Scott Grauer

Thank you, Marc.
Turning to our operating results for the quarter. On a linked quarter basis, total fee income grew $4.4 million, contributing $206.9 million to revenue and accounting for 40% of total revenue. This isn’t a short-term trend. Our free income has averaged 39% of total revenue over the past five years, a key differentiator for us from our peers and it has been a hallmark to our success in varying economic conditions.
I’d like to begin by covering our markets and securities businesses on slide 10. Our trading fees rebounded nicely, increasing 39.8% to $33.1 million during the quarter driven by higher MBS volumes and widened spreads as client demand following anticipated rate cuts returned to more normal levels than we saw in the prior quarter. Due to the steepening yield curve environment, I’d like to note that total trading revenue includes two distinct pieces: trading fees and trading related net interest income. This quarter, trading fees were $33.1 million while trading related net interest income was $4.6 million.
If the yield curve steepens further and trading portfolio yields move further above their funding cost, we will see additional revenue mix shift with more of our total trading revenue coming from net interest income as opposed to fee income as we’ve seen in recent quarters. We’ve provided a table on this slide to allow you to see this dynamic historically. Mortgage banking revenue has remained relatively steady for the past four quarters coming in at $18.1 million for the fourth quarter.
Our other markets and securities businesses continue to produce solid results with syndication fees up $1.4 million over the prior quarter. Investment banking fees were down $5.5 million. However, this is coming off a record quarter and the business is still performing exceptionally well.
Turning to slide 11. Asset management revenue grew $3.2 million or 5.6% linked quarter, reflecting growth in our trust fee income. AUMA grew $3.9 billion quarter over quarter, eclipsing $114 billion with increased market valuations and continued growth in client relationships.
I know my commentary on this slide is less than usual but the consistent results these businesses have exhibited over time speak for themselves.
And now, I’ll hand the call over to Marty to cover the financials.

Martin Grunst

Thank you, Scott.
On slide 13, net interest income was up $4.9 million, supported by growth in both the trading and nontrading components. Headline net interest margin expanded 7 basis points with core net interest margin excluding trading also up 7 basis points. The 7-basis point increase in core margin was driven by several factors. The securities portfolio continued to reinvest cash flows at higher current market yields. The fixed rate portion of the loan portfolio also continued to reprice cash flows at higher current market fixed rates.
Non-interest bearing DDA grew in Q4 driven by normal seasonal balance increases. We saw strong interest-bearing deposit growth and liabilities were priced more quickly than assets in response to rate cuts by the Federal Reserve. Both the magnitude and the pace of this quarter’s deposit repricing activity aligns with our expectations and gives us great confidence in our ability to realize our previously communicated deposit beta expectations should short term market rates continue to decline.
Last quarter, we noted that if deposit balances increased significantly, it could mute the deposit beta somewhat but would result in a better liability beta and be accretive to margin and NII. This played out in the fourth quarter as we grew average interest-bearing deposit balances by approximately $1 billion, offsetting a portion of our wholesale funding at below wholesale cost.
Turning to slide 14. Linked quarter, total expenses increased $6.6 million or 1.9%. Personnel expenses grew $3.9 million as normal levels of trading activity resumed and we continue to invest in our businesses. Nonpersonnel expense grew $2.8 million largely due to project related professional fees and seasonal business promotion costs.
Slide 15 provides our view on full year 2025 and I will note a couple of items. Loan balance projections reflect our strong track record of growing C&I as well as our specialty lending businesses. We have ample headroom versus our concentration limits due to high levels of paydowns in 2024 which we do not expect to recur this year. For total revenue, we expect growth in the mid to upper single digit range. That growth rate would be unaffected by the mix shift between trading NII and trading fees that Scott got noted earlier.
Within total revenue, based on our assumptions for rates, we expect growth in net interest income to be above single digit. However, that growth rate is driven incrementally higher by the mix shift from trading fees to trading NII. We expect growth in core NII ex-trading to be mid to upper single digit.
Fees and commissions growth is expected to be lower single digit. However, that growth rate is affected the opposite way by the trading revenue mix shift. Excluding trading, fees and commissions would also be in the mid to upper single digit range.
Lastly, I will note that the remarkably low level of nonperforming assets we see today supports our view that charge-offs will remain well controlled for the foreseeable future.
With that, I would like to hand the call back to the operator for Q&A which will be followed by closing remarks from Stacy.

Operator

(Operator Instructions)
Jon Arfstrom, RBC Capital Markets.

Jon Arfstrom

Can you talk a little bit more about the payoff activity and some of the expected changes you’re thinking about in ’25? You used the phrase over time and I’m just kind of curious when the paydowns could change or is that already starting to happen?

Stacy Kymes

You’re talking about with respect to loan growth and our kind of outlook?

Jon Arfstrom

Yes. Exactly.

Stacy Kymes

Yeah. I think look, we’ve spent so much time and energy investing in the core C&I areas because that’s the longest sales cycle. That’s the hardest business to move. And we really saw that play out in our favor in 2024 with core C&I growing 8% which I think is very, very good.
The unexpected headwind really was the core specialty businesses. Healthcare, commercial real estate and energy were a headwind to loan growth. And really because of some idiosyncratic things related to the timing of the capital markets, whether it’s respect to energy or whether it’s the shape of the yield curve and created some permanent financing opportunities outside of the core portfolio for real estate and for healthcare.
And so if you think those return back to kind of more normal growth patterns and we do. We have plenty of concentration cap room in all of those areas. And if you think you can sustain the C&I growth, which we think we can, I think the guidance that we have around loan growth for next year is very achievable.

Marc Maun

Yeah. Jon, the one thing I would add on the energy side of this is that in the fourth quarter, we did generate a lot of new relationships at a much faster pace than we did the previous three quarters, which will — which created a lot of loan growth we experienced in energy in the fourth quarter. And we expect that we’ll see the — continue to see some of the benefits from that.
So that seems to have turned around and it is in a growth pattern right now.

Jon Arfstrom

Good. I did want to ask about that as well just deeper on energy. What do you think about in terms of the energy lending outlook with the new administration and feels like maybe price has come down. I don’t know. But how do you think about risk to that as well? Just curious on the administration. Your thoughts there?

Stacy Kymes

Yeah. I think it’s too soon to know exactly. I think that certainly we expect that the incoming administration will open up more federal lands for drilling. I think the permitting process will be better. I think that they’re going to commit to filling the strategic petroleum reserve, which I think is a positive. But I think you cannot ignore borrower behavior. And those guys are going to do what’s in their best interest. And that’s being disciplined about how they spend their capital investment and getting a return on that capital investment.
And so those energy companies will make discrete decisions at the point in time based on what they can hedge out on the curve and what kind of return they can get for drilling activity. And so I think it’s too soon to know how it may spur or not spur actual drilling activity. But I think we have a lot of confidence in our borrowers that they’re going to make the best economic decision at the point in time for them to make sense for them.

Operator

Matt Olney, Stephens Inc.

Matt Olney

I want to ask more about the guidance for net interest income in 2025. I think that guidance you guys provided us assumes a low double digit growth number in ’25 versus ’24. And I’m just struggling to get there. Can you give us any kind of launch point or guidance for the first quarter that could help us appreciate what you guys see on your side with respect to net interest income?

Stacy Kymes

Yeah. Matt, I think it’s useful to think about our guidance in two pieces sort of the core margin ex-trading and then the trading piece. And as you think through just the core margin ex-trading, you’re going to see kind of the same factors that you’ve seen in the last couple of quarters just play out in first quarter and throughout the year where you’ve got security, all the fixed rate asset repricing. That’s going to continue to reprice up. That’s going to be supportive. Both loan growth and deposit growth are going to be supportive of margin.
And it’s nice to see the DDA trends be supportive of margin recently. But then when you look at the second half of that, the trading component, here’s the way to think about that. So in Q4, just the trading portfolio, so that’s $5.6 billion. That had a yield of 4.9% which you can see and a spread of 36 basis points over its funding costs, which you can see on page 17. And so that’s $4.6 million of net interest income provided in Q4. As you play that over into 2025, the volume of trading is probably still going to be in that $5.5 billion to $6 billion territory, but yields on the trading account should come up.
30-year mortgage yields are — mortgage-backed security yields are around 5.85%. And you’ve seen short term rates come down in the fourth quarter. So you’ll see a full quarter effect of that in Q1 and then later in the year, we’re assuming two more cuts. And so over the course of 2025, that funding cost comes down and that spread, that was 36 basis points in Q4 now that could be easily 100 basis points or a little bit more for 2025 overall.
So you can see that’s a pretty big pick up year over year in that trading related margin. And that will grow quarter by quarter as you get that widening playing out by the change more in the short-term funding costs. Now importantly, that growth gets offset in the trading fees with the hedge costs. But I think most importantly, to think about our trading — our total revenue, we’ve given a guide of mid to upper single digits for total revenue, that’s very attainable for us.
And when you look at the three pieces within that, NII ex-trading fees, ex-trading and then trading in total, both the NII ex-trading and the fees ex-trading are also mid to upper single digits very attainable for us. And then the last piece, trading in total. Regardless of how much of that is fees versus margin, we feel very good about how that trading revenue is going to go over the course of 2025 versus ’24.

Scott Grauer

And Scott might want to add a little bit to that.
Sure. So I think that, as Marty indicated, those component pieces kind of get to the forecast going forward. But our — what we’ve seen really in the last six weeks or so of 2024 and is carrying on into the beginning of this year, our clients on the institutional side, a fair amount of which are financial institutions prefer clarity that has emerged. So when you think about the election in the rearview mirror and a little bit better clarity, not certainty but clarity around potential fed moves, we’re seeing quite a bit of increased appetite and willingness to invest out the curve which bodes well for demand for our business.
So as Marty said, we’re optimistic and feel confident about our ability to continue to move forward on the rate that we’ve established here in the fourth quarter.

Matt Olney

Well, I appreciate the commentary on that. And just to follow up on maybe a point that Marty made, I see in the deck, you — the guidance assumes two Fed cuts throughout the year. I think you guys give us a time frame of those cuts. What does that guidance assume or imply with respect to the shape of the yield curve?

Stacy Kymes

Yeah. So we’re assuming that long term rates are really about where they are today give or take throughout the year. So we’re not putting any particular changes in steepness to that curve other than what’s driven by the short term. Does that make sense?
Yeah. So your curve, what, I guess would improve a little bit, but the long-term rates stay flat, short term rates come in with those assumptions.
Exactly. Yes.

Operator

Peter Winter, D.A. Davidson.

Peter Winter

I was wondering if I could just dig into Matt’s question a little bit more. Just the net interest income outlook, it’s a pretty wide range for you guys. Just can you Marty maybe talk about some of the drivers to the upper end of the range versus the lower end of the range?

Stacy Kymes

Yeah. I think one of the — we feel very good about all the things that I laid out. We’ve got that securities repricing, fixed rate repricing. That’s very visible and durable throughout the year. The one thing that’s interesting that I’ll point out Peter is our loan to deposit ratio is very low. And that gives us an awful lot of flexibility when you think about how we manage deposit pricing. And that gives us room to be a little bit more aggressive on the yield side if we want to.
That’s not how we built our plan, but to the extent that we want to push on that. Rate cuts certainly make that easier, but are not necessary to be able to take some incremental pricing action if we want to on the deposit side.

Peter Winter

And I hear you. I see the guidance on end of period loans but just — I’m just wondering what average loans would do. What you’re expecting for that range?

Stacy Kymes

Peter, this is Stacy. And I think we’re — you should assume the growth is relatively routable over the period. So we’re not assuming any kind of elevated growth in that particular period, but we try to grow it kind of typically a similar amount in every quarter. We understand the actual results will differ from that. But as we plan for 2025, we kind of look at it routably over the period.

Peter Winter

And Stacy, if I could just ask, you talked about it in the opening remarks, but you’ve had nice success with the team lift outs and it’s been additive to grow. Do you have a pipeline of additional team lift outs and looking to continue to do that? Because M&A, my sense is still kind of a low priority.

Stacy Kymes

Yeah. I think from our perspective, there’s not a team lift out pipeline per se, but we are constantly pipelining for new talent. So every single market we’re in, we have targets for revenue producers that we’re trying to add to our company. And it’s been a really important strategy for us. In 2023 and 2024, we saw the dividends for that, particularly the latter half of ’24 and that we’ll continue to do that.
We think that’s very positive, very accretive to our earnings, very accretive to our franchise value to do that. And so we continue to be very aggressive in all of our markets in adding talent. And this year will be no different in that regard.

Operator

Brett Rabatin, Hovde Group.

Brett Rabatin

Wanted to beat the loan growth horse one more time. So if I understand, it looks to me like the payoffs and reductions in energy have swung the other way with some renewed momentum in energy. I didn’t get a clear understanding of if you think the healthcare portfolio was getting to its bottom. And then also just within the commercial real estate bucket, you’ve obviously had growth in multi family, offsetting other declines.
So I just wanted to get a sense of what you think happens with the kind of the non core C&I book. And then also it seems like Oklahoma has been driving the strength in the loan portfolio. And wanted just to hear if that’s a function maybe of Texas being more competitive lending wise, with rates or any other color around geography?

Stacy Kymes

Well, okay. There’s several questions in there. So let me start with healthcare. And basically, the interest rate environment generated opportunities from a — for a number of our customers to refinance on a long-term basis into the HUD market. And we see that a lot of that activity has taken place. And it’s going to start to taper off and we will see more opportunities for us to begin our growth on the healthcare side.
So similarly, in the HUD, the interest rate environment has had an impact on our CRE portfolio because again, they’re taking advantage of the opportunity to do some normal course of business, move things off there — off the short-term maturity to a longer-term maturity with a fixed interest rate. And again, those interest rates aren’t moving like they were.
So we do expect those opportunities to occur and we’re adding new construction opportunities that are going to give us the fund up opportunity, which is a cycle we have historically gone through in our company. And we have a capacity in CRE relative to our concentration limits. That’s given us a lot of opportunity to grow that particular portfolio.
And we are going to consistently look for the best deals. We do have different concentration limits for different types of real estate. But we’re always looking for deals and have capacity for the various types of opportunities that exist. And we will look for the best deals that we can there. And we feel like we can generate additional growth in the CRE. On the C&I side, it’s more of just a consistent approach that we’ve taken. The Oklahoma market may have driven a little more. We’ve been here longer. And we have a lot more relationships and some of those are renewing, but we saw a substantial amount of growth in Texas and the C&I in the fourth quarter, which is starting to show that the investment we’ve made in Texas is starting to pay dividends.
It takes time to generate C&I loan growth. And so as we’ve made those investments, we’re not going to get the transactions that we might get in the specialty industries, but we’re generating a lot of business now that we’ve spent and committed the time and investment on the C&I side in Texas. And we’re starting to see that all the other markets generally grew at a double-digit rate on the C&I side as well. So I feel really good about the fact that it’s been a consistent performer for the last couple of years. And barring any change in the economic factors, we would expect that to continue. And so the combination is why we come up with the kind of guidance we’re providing.

Brett Rabatin

And then just back on the trading business again, is there — and I know it’s probably tough to come up with an exact number in terms of what you’re giving guidance to. But is there a way to extrapolate or can you give an idea of how much dollar change you expect in the trading to move from fee income to NII?

Stacy Kymes

Yeah. So we’re probably not going to give a guidance on trading and per se. That’d be a tough one to wrap your head around. But certainly, there’s a shift that’s going to go on between that growth based on our economic assumptions in NII down to fees. But the point is trading in total, total trading revenue, that’s going to grow nicely year over year. And I think that’s really the important point.
Brett, I think if you look at slide 10 in the slide deck that we provided to accompany the call, you can see how we’ve broken out the impact of trading fees and trading NII over time. And I think Marty’s giving you all the component pieces that you need to kind of fill in the blanks from there. And we provided the total revenue line item so that you can kind of see at the end of the day does it make sense or not. And so we’re not going to break it down by quarter or discrete line item, but I think the pieces are there for you to put it together.

Operator

Woody Lay, KBW.

Woody Lay

Wanted to start on deposits. I mean the fourth quarter was a really successful quarter. And really that success has been consistent throughout the year. Any color on what drove the deposit growth in the fourth quarter? And does the success impact your deposit strategy throughout 2025?

Stacy Kymes

Yeah. I’d say that the growth was across all three lines of business. We were happy to see that. A little bit more in commercial as you might expect for us. But it was all three lines of business contributing. And it did not change our strategy. I mean we’re very happy with the growth that we’ve got, the track record we have, and we expect to continue to grow deposits next year. It may not be at the very high rate that we were able to achieve this year. But we’re very happy with the traction that we’ve got going on in that business. And the level of price competitiveness has settled down from what it was a year ago. And that’s been a great factor as well.

Woody Lay

And then maybe shifting over to capital. I was just curious does a more favorable regulatory backdrop sort of impact the way you view your excess capital position and how you might deploy that capital?

Marc Maun

Yeah. I’d say regulatory backdrop, that’s certainly helpful but it doesn’t really fundamentally change how we think about capital. We know we’ve got a strong capital position. We’ve got a level of excess capital and that just represents earnings in reserve. And we’re going to be very patient and thoughtful about how we deliver that. How we deploy that into whatever avenue is best for long term shareholder return.
But Woody, given and kind of how we risk manage the bank and our outstanding CRA rating and those types of things, the regulatory overlay doesn’t really impact how we can do that in any particular environment. We’ve kind of done things the right way and so that gives us the latitude depending regardless of who’s in charge to be able to do the right things for shareholders here.

Operator

Tim Mitchell, Raymond James.

Tim Mitchell

It’s Tim on from Michael.
Just want to start out on expenses on kind of a mid-single digit growth range. Obviously probably tied to the fee businesses and kind of upper versus lower end, how they perform. But I just want to appreciate, are there any underlying investments and a potential team lift outs that we might — which kind of contemplate as we think about that range for the year?

Stacy Kymes

Yeah. There’s nothing that would qualify as team lift out, but like Stacy said earlier, we are constantly looking to grow talent and that’s a driver for year over year growth, both improvement in talent-based growth in the talent base and continued IT investments. All those things are propelling long term growth and that’s really the core drivers there. And as you know, Q1, you’ll see payroll taxes. That hits in Q1 like it does every year. But pretty standard revenue growth is going to drive a component of the expense growth as well.
We’re constantly looking to see where can we make an investment today to add value tomorrow. And one of the things that we’ve spent a lot of time on recently is how we think about holistically our mortgage businesses. And so you’ll see us in the latter half really the — probably the fourth quarter — late third quarter, fourth quarter, really begin to be fully engaged in the mortgage warehouse lending space.
In order to do that, we’ve had to hire talent. Some of that was onboarded in the fourth quarter and some of that will be onboarded in future periods. But it’s things like that where the, call it, the San Antonio team broadly or things like mortgage warehouse or individual contributors or individual revenue producers in each of these markets, we are constantly looking for opportunities where we can spend a dollar today to create a better opportunity for us to grow top line revenue in the future.
And so I think being able to maintain that efficiency ratio while we’re making these types of investments is really positive for our franchise and we’re excited about these investments that we’re making.

Tim Mitchell

And I appreciate the color on mortgage and what you said about trading so far. You talked about investment banking and brokerage and some of the other kind of fee businesses and what the trends are there. It seems like the outlook for investment banking and whatnot. Is it kind of improving kind of post selection? Just curious what you’re seeing on that front?

Scott Grauer

Yeah. So this is Scott. So as you noticed in the slides, if you take the impact of — on the results, if you take the impact from our sale of the insurance unit out, our retail brokerage business is growing at 13%. So we’re confident in the trends there and we continue to gain momentum. With that piece of our business, our investment banking activity has been exceptionally strong. We saw a decline in the fourth quarter, but that is really more seasonal as the majority of our investment banking activity centers around municipal finance. And in particular, we have a high concentration of that activity in Texas. And so when the elections and predominantly the Independent School District debt cycles, gear back up here, well, we feel very good about our positioning there and the demand for that activity. Because we don’t participate in the equity investment banking activity.

Operator

Timur Braziler, Wells Fargo.

Timur Braziler

My first question is on the deposit side. It was a pretty impressive result, especially considering that CD rates really didn’t move in the quarter. Just wondering if you can remind us what the maturation schedule looks like there and looks like balances even declined a little bit in the quarter. Just how much of a head start maybe from a margin standpoint you’re getting from time deposits in the first half of ’25?

Stacy Kymes

Yeah. So time deposits, our mix there isn’t terribly huge. We actually let a couple of brokered CDs, roll off that we put on a little over a year ago. And so that’s part of the drop there. The core portfolio is pretty short. And by the way, our brokered CDs are less than 1% today. So it’s not meaningful. But that drove a drop.
Our CD portfolio tends to be fairly short. It’s — a lot of that’s original 4-month maturity or 10-month maturity. So it’s only a couple of months of maturity. And so you’ll see some of that reprice nicely in the first quarter as we see rates being a little bit lower than when those were put on.
And then just looking at the trading securities, did I hear correct? It’s 5.8% is the current kind of ongoing rate versus the 4.90% rate for 4Q?
Well, so keep in mind, 4.90% is the weighted average portfolio for the whole trading book. Today’s new current coupon MBS is 5.80% or so. But that portfolio will always have some blend of recently produced mortgages as well as some just secondary trading in older vintages. So but just know that it won’t be precisely moving towards exactly the current production level.

Timur Braziler

And then just lastly for me, just the commercial real estate payoff activity. You had made a comment that was some normal course of business is going into year end. I’m just wondering with rates backing up, if that drove any of that activity or just kind of the timing there. And I guess as you look at the stuff that could still be refied away, what component of that has now largely found a new home?

Stacy Kymes

Hey, Timur. I would just point you to the fact that you look at what happened at 10-year rates kind of in September. You had those rates drop a lot. And so that customer base that did pay off right at the end of Q3 and a bunch of Q4, those guys were taking down takeout at that low point in rates. And so as rates came back up, that’s what’s going to slow it going forward.

Operator

Ben Gerlinger, Citi.

Ben Gerlinger

Just kind of looking at the expense guys. It says mid-single digits. I’m assuming that’s let’s call it $4 million to $6 million and now the pivot from this fee based NII. And trading really doesn’t drive any expenses. So it just kind of 10,000 foot view, what gets us to the high end of the range? Because it’s still low end. And would you kind of manage it towards total revenue if possible or is it more overall investment? Or it doesn’t matter as much?

Marc Maun

Well, there’s a portion of that, that’s just the investments we’re making in the business. A lot of the stuff that Stacy talked about, those are long term decisions and we’re making those decisions based on their long-term effect to drive shareholder value. There is a piece within the expenses that is really tied to the trading businesses and mortgage production, all of the transactional businesses, even loan production to some extent. And so that component will behave as variable. And so as revenue comes up, you’ll see that would be something that would move us to the higher end of the range, for example.
And I know over the past let’s call it a couple of years at a minimum, you’ve been a bit of C&I hiring sales cycle, whatever you want to call it but hiring individual bankers across the footprint. And those really funded up and was supportive of this above peer growth. I know you’re not stopping but it breaks the elevated — does that change your idea of what kind of C&I or potentially, what other lending styles that might be more attractive in this call it higher for longer environment?
Interest rates really have not had an impact on who we’re focused on. We are very much focused on the types of industries that we feel can provide the credit metrics and the credit structure that we are comfortable in lending into. And we’ve focused more on having the ability to have a secondary source of repayment, strong guarantors, ways that can prevent — that we can generate business but prevent us from creating future credit problems.
And management teams that can manage through cycles, not startup businesses, ones that are — that fit and the ability to manage long term. We don’t focus on interest rates is driving anything associated with our C&I calling efforts.

Stacy Kymes

And Ben, this is Stacy. I think if you look at interest rates on a any kind of historical spectrum, rates aren’t high. I think that we all get blended into the last 10 years and rates were zero and that created its own set of behaviors. But I think if you think about where rates are on a historical basis, rates are kind of in the middle of the fairway. And I think that this is much more likely to be the business environment than having really low rates.
I think that was an unusual period of time coming out of the great financial crisis and then the pandemic and those types of things where you had really low rates for an extended period of time. I just don’t think that’s normal nor sustainable. And I think borrower behavior will adapt to this more normal. And frankly, we see it as a positive just from the shape of the yield curve. I mean we’re awfully excited to have a yield curve that slopes as opposed to essentially a flat and inverted curve over the last decade.
So we see net-net overall that as a positive for financials overall.

Operator

As there are no further questions at this time, that concludes the Q&A session.
I would now like to turn the call over to Stacy Kymes, President and CEO for closing remarks.

Stacy Kymes

Thank you everyone for joining us for our discussion today.
I’m very pleased with the strong results we reported this quarter and for the full year. Credit quality is exceptional. Core loans are growing, and the right business activity is happening and continue — to continue this trend into the future. Margin is robust and expanding and our strong fee income businesses continue to post solid results. We spent a long time constructing this foundation and we’re proud of the earnings engine we built.
I do want to take a moment to recognize Marc Maun. Marc has been an integral part of building this business over the last 40 years. We as an organization and I personally am thankful for Marc, his determination, grit and decisive leadership during his career at BOKF. This will be Marc’s last conference call with us and on behalf of the organization, I’d like to say, thank you.
We appreciate your interest in BOK Financial and your willingness to spend time with us this afternoon. Please reach out to Heather King if you have questions at h.king@bokf.com.

Operator

That concludes today’s meeting. Thank you for your participation. You may now disconnect.