Shares of BOK Financial Corporation BOKF lost over 1% after the company recorded a negative earnings surprise of more than 34% in first-quarter 2016. Earnings per share of 64 cents lagged the Zacks Consensus Estimate of 98 cents. Further, the reported figure compared unfavorably with the prior year quarter earnings of $1.08 per share.Bok Financial Corporation (BOKF) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany The Oklahoma-based company recorded significant provisions in the reported quarter, primarily tied with its energy portfolio. Among other significant items, the quarter recorded accruals for legal matters, increased deposit insurance expenses and a net decline in fair value of mortgage servicing rights (MSR) assets.However, revenues improved, driven by higher net interest income. Also, loan and deposit balances exhibited growth.Net income attributable to common shareholders was $42.6 million, down nearly 43.1% year over year. Performance in DetailBOK Financial reported revenues of $342.3 million in the quarter, up 2.6% year over year. However, the figure missed the Zacks Consensus Estimate of $350.0 million.Net interest revenues came in at $182.6 million in the quarter, up 8.9% year over year. Net interest margin (NIM) also increased 10 basis points (bps) year over year to 2.64%.Yield on average earnings assets increased 12 bps year over year at 2.92%, while loan yields decreased 2 bps to 3.57%.BOK Financial’s fees and commissions revenues amounted to $165.6 million, relatively stable on a year-over-year basis. The quarter witnessed increases in several income categories including in transaction card revenues, fiduciary & asset management and deposit service charges & fees. The increases were offset by lower mortgage banking revenues and other revenue.Total other operating expenses were $244.9 million, up 11.2% year over year. Expenses included several significant items including increase in litigation accruals by $4.1 million and $2.7 million post-acquisition valuation adjustment tied with a consolidated merchant banking investment. The quarter also recorded higher expenses including personnel costs, professional fees and services and data processing and communications.Total loans at BOK Financial as of Mar 31, 2016 were $16.02 billion, up 9.1% year over year, mainly due to an increase in commercial loans, commercial real estate loans and consumer loans. As of the same date, deposits amounted to $20.42 billion, down 3.5% from the year-ago period.Credit QualityBOK Financial’s asset quality deteriorated during the quarter. Driven by continued credit migration in the company’s energy loan portfolio, the quarter recorded provisions of $35 million as against no provision in the prior-year quarter.Also, net charge-offs were $22.5 million, against net recoveries of $8.4 million in the prior-year period. Further, the combined allowance for credit losses was 1.50% of outstanding loans as of Mar 31, 2016, up from 1.35% as of Mar 31, 2015.Additionally, nonperforming assets totaled $349.3 million or 2.18% of outstanding loans and repossessed assets as of Mar 31, 2016, up from $206.6 million or 1.40% as of Dec 31, 2014.Capital PositionArmed with healthy capital ratios, BOK Financial and its subsidiary banks exceeded the regulatory well-capitalized level. The company became subject to new regulatory rules on Jan 1, 2015. As of Mar 31, 2016, the common equity Tier 1 ratio was 12.00%.Tier 1 and total capital ratios were 12.00% and 13.21%, compared with 13.07% and 14.39%, respectively, as of Mar 31, 2015. Leverage ratio was 9.12% as against 9.74% as of Mar 31, 2015.Outlook2016Considering continued credit migration in the energy portfolio, provision for credit losses for the full year is now expected at the higher end of the previous guidance range of $60–$80 million. Notably, management expects most of this to be recorded in the first half of the year.Excluding provisions, the company largely reiterated its guidance. For full-year 2016, the company expects mid single-digit loan growth.NII is likely to increase while NIM is expected to trend stable to rising. Also, income from fees and commissions are anticipated to record mid single-digit growth. Notably, the company expects a decrease of about $200–$250 million per quarter in fixed income portfolio.However, overall revenue growth is likely to outpace the expense growth. Regarding the acquisition of MBT Bancshares, the parent company of Missouri Bank and Trust of Kansas City (“mobank”), BOK Financial is likely to incur $6–$8 million of pretax consolidation-related charges, post closing. The deal is expected to be closed in the second quarter of 2016.Our ViewpointBOK Financial’s results do not reflect a decent performance in the quarter. However, continued revenue growth keeps us optimistic about the stock. The strategic expansions and local-leadership based business model of BOK Financial helped it to transform into a leading financial service provider from a small bank in Oklahoma.Notably, last month, the company acquired Weaver Wealth Management that enhanced BOK Financial‘s assets under management and administration and expanded the company’s wealth management reach in Texas. Further, last December the company announced an agreement to acquire MBT Bancshares, which will enhance BOK Financial's foothold in Kansas City. We believe that the company’s diverse revenue mix and favorable geographic footprint would support growth in the upcoming quarters.However, several issues including stressed energy sector, stringent regulatory landscape and rising expenses remain the concerns.BOK Financial currently carries a Zacks Rank #3 (Hold).Performance of Other Southwest BanksProsperity Bancshares Inc. PB reported earnings per share of 98 cents in first-quarter 2016, which beat the Zacks Consensus Estimate of 95 cents. However, the bottom line was 7% below the year-ago quarter tally. Earnings included purchase accounting adjustments for both periods. Results were aided by higher revenues and growth in loans and deposits. However, a rise in expenses and provisions were the major headwinds.Texas Capital Bancshares Inc. TCBI reported a negative surprise of 26.9% in the first quarter of 2016. Earnings per share of 49 cents missed the Zacks Consensus Estimate of 67 cents by a wide margin. Moreover, results were also below the prior-year quarter earnings of 70 cents. Elevated expenses and deteriorating credit quality remained concerns. However, higher revenues and strong loans and deposit balances reflected organic growth.Cullen/Frost Bankers, Inc. CFR reported a positive earnings surprise of 3.9% in first-quarter 2016 wherein earnings per share came in at $1.07, beating the Zacks Consensus Estimate by 4 cents. However, results were slightly below the prior-year quarter figure of $1.11. Results reflected higher revenues and growth in loan and deposit balances. However, elevated non-interest expenses and deteriorated credit metrics were the undermining factors.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TEXAS CAP BCSHS (TCBI): Free Stock Analysis Report BOK FINL CORP (BOKF): Free Stock Analysis Report CULLEN FROST BK (CFR): Free Stock Analysis Report PROSPERITY BCSH (PB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research