XML 19 R10.htm IDEA: XBRL DOCUMENT
v3.23.2

Derivatives | 6 Months Ended
--- | ---
Jun. 30, 2023
Derivative Instrument Detail [Abstract] |
Derivatives [Text Block] | Derivatives Derivative instruments may be used by the Company as part of its internal risk management programs or may be offered to customers. All derivative instruments are carried at fair value, and changes in fair value are reported in earnings as they occur. Credit risk is also considered in determining fair value. Deterioration in the credit rating of customer or other counterparties reduce the fair value of asset contracts. Deterioration of our credit rating could decrease the fair value of our derivative liabilities. When bilateral netting agreements or similar arrangements exist between the Company and its counterparties that create a single legal claim or obligation to pay or receive the net amount in settlement of the individual derivative contracts, the Company reports derivative assets and liabilities on a net by derivative contract type by counterparty basis. Derivative contracts may require the Company to provide or receive cash margin as collateral for derivative assets and liabilities. Derivative assets and liabilities are reported net of cash margin when certain conditions are met. In addition, derivative contracts executed with customers under Customer Risk Management Programs may be secured by non-cash collateral in conjunction with a credit agreement with that customer. Access to collateral in the event of default is reasonably assured. None of these derivative contracts have been designated as hedging instruments for accounting purposes. Customer Risk Management Programs BOK Financial offers programs to permit its customers to manage various risks, including fluctuations in energy, cattle and other agricultural products, interest rates and foreign exchange rates with derivative contracts. Customers may also manage interest rate risk through interest rate swaps used by borrowers to modify interest rate terms of their loans. Derivative contracts are executed between the customers and BOK Financial. Offsetting contracts are executed between BOK Financial and other selected counterparties to minimize the risk of changes in commodity prices, interest rates or foreign exchange rates. The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to BOK Financial as profit and compensation for administrative costs and credit risk which is recognized over the life of the contracts and included in Other operating revenue – Brokerage and trading revenue in the Consolidated Statements of Earnings. Trading BOK Financial may offer derivative instruments such as to-be-announced securities to mortgage banking customers to enable them to manage their market risk or to mitigate the Company's market risk of holding trading securities. Changes in the fair value of derivative instruments for trading purposes or used to mitigate the market risk of holding trading securities are included in Other operating revenue – Brokerage and trading revenue. Internal Risk Management Programs BOK Financial may use derivative contracts in managing its interest rate sensitivity, as part of its economic hedge of the change in the fair value of mortgage servicing rights. Changes in the fair value of derivative instruments used in managing interest rate sensitivity and as part of the economic hedge of changes in the fair value of mortgage servicing rights are included in Other operating revenue – Gain (loss) on derivatives, net in the Consolidated Statements of Earnings. As discussed in Note 5, certain derivative contracts not designated as hedging instruments related to mortgage loan commitments and forward sales contracts are included in Residential mortgage loans held for sale on the Consolidated Balance Sheets. See Note 5 for additional discussion of notional, fair value and impact on earnings of these contracts. The following table summarizes the fair values of derivative contracts recorded as "derivative contracts" assets and liabilities in the balance sheet at June 30, 2023 (in thousands):
|  | Assets
|  | Notional 1 |  | Gross Fair Value |  | Netting Adjustments |  | Net Fair Value Before Cash Collateral |  | Cash Collateral |  | Fair Value Net of Cash Collateral
Customer risk management programs: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 2,667,177 |  |  | $ | 150,410 |  |  | $ | — |  |  | $ | 150,410 |  |  | $ | (146,700) |  |  | $ | 3,710 |
Energy contracts |  | 8,269,088 |  |  | 914,855 |  |  | (587,545) |  |  | 327,310 |  |  | (120,398) |  |  | 206,912 |
Foreign exchange contracts |  | 62,860 |  |  | 60,509 |  |  | — |  |  | 60,509 |  |  | (1,862) |  |  | 58,647 |
Equity option contracts |  | 8,107 |  |  | 60 |  |  | — |  |  | 60 |  |  | (56) |  |  | 4 |
Total customer risk management programs |  | 11,007,232 |  |  | 1,125,834 |  |  | (587,545) |  |  | 538,289 |  |  | (269,016) |  |  | 269,273 |
Trading |  | 24,565,864 |  |  | 133,391 |  |  | (51,516) |  |  | 81,875 |  |  | (153) |  |  | 81,722 |
Internal risk management programs |  | 190,000 |  |  | 2,042 |  |  | — |  |  | 2,042 |  |  | — |  |  | 2,042 |
Total derivative contracts |  | $ | 35,763,096 |  |  | $ | 1,261,267 |  |  | $ | (639,061) |  |  | $ | 622,206 |  |  | $ | (269,169) |  |  | $ | 353,037 |
|  | Liabilities
|  | Notional 1 |  | Gross Fair Value |  | Netting Adjustments |  | Net Fair Value Before Cash Collateral |  | Cash Collateral |  | Fair Value Net of Cash Collateral
Customer risk management programs: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 2,667,177 |  |  | $ | 150,412 |  |  | $ | — |  |  | $ | 150,412 |  |  | $ | — |  |  | $ | 150,412 |
Energy contracts |  | 8,266,679 |  |  | 903,909 |  |  | (587,545) |  |  | 316,364 |  |  | (23,427) |  |  | 292,937 |
Foreign exchange contracts |  | 62,154 |  |  | 59,632 |  |  | — |  |  | 59,632 |  |  | — |  |  | 59,632 |
Equity option contracts |  | 8,107 |  |  | 60 |  |  | — |  |  | 60 |  |  | — |  |  | 60 |
Total customer risk management programs |  | 11,004,117 |  |  | 1,114,013 |  |  | (587,545) |  |  | 526,468 |  |  | (23,427) |  |  | 503,041 |
Trading |  | 20,340,860 |  |  | 96,506 |  |  | (51,516) |  |  | 44,990 |  |  | (1,559) |  |  | 43,431 |
Internal risk management programs |  | 335,000 |  |  | 4,181 |  |  | — |  |  | 4,181 |  |  | — |  |  | 4,181 |
Total derivative contracts |  | $ | 31,679,977 |  |  | $ | 1,214,700 |  |  | $ | (639,061) |  |  | $ | 575,639 |  |  | $ | (24,986) |  |  | $ | 550,653 |
1 Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract. The following table summarizes the fair values of derivative contracts recorded as "derivative contracts" assets and liabilities in the balance sheet at December 31, 2022 (in thousands):
|  | Assets
|  | Notional 1 |  | Gross Fair Value |  | Netting Adjustments |  | Net Fair Value Before Cash Collateral |  | Cash Collateral |  | Fair Value Net of Cash Collateral
Customer risk management programs: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 2,629,318 |  |  | $ | 158,825 |  |  | $ | — |  |  | $ | 158,825 |  |  | $ | (114,955) |  |  | $ | 43,870 |
Energy contracts |  | 7,918,020 |  |  | 1,232,283 |  |  | (594,543) |  |  | 637,740 |  |  | (67,024) |  |  | 570,716 |
Foreign exchange contracts |  | 219,791 |  |  | 216,569 |  |  | — |  |  | 216,569 |  |  | — |  |  | 216,569 |
Equity option contracts |  | 21,102 |  |  | 193 |  |  | — |  |  | 193 |  |  | (109) |  |  | 84 |
Total customer risk management programs |  | 10,788,231 |  |  | 1,607,870 |  |  | (594,543) |  |  | 1,013,327 |  |  | (182,088) |  |  | 831,239 |
Trading |  | 17,400,037 |  |  | 126,910 |  |  | (74,647) |  |  | 52,263 |  |  | (4,646) |  |  | 47,617 |
Internal risk management programs |  | 85,000 |  |  | 1,500 |  |  | (13) |  |  | 1,487 |  |  | — |  |  | 1,487 |
Total derivative contracts |  | $ | 28,273,268 |  |  | $ | 1,736,280 |  |  | $ | (669,203) |  |  | $ | 1,067,077 |  |  | $ | (186,734) |  |  | $ | 880,343 |
|  | Liabilities
|  | Notional 1 |  | Gross Fair Value |  | Netting Adjustments |  | Net Fair Value Before Cash Collateral |  | Cash Collateral |  | Fair Value Net of Cash Collateral
Customer risk management programs: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 2,629,122 |  |  | $ | 158,816 |  |  | $ | — |  |  | $ | 158,816 |  |  | $ | — |  |  | $ | 158,816 |
Energy contracts |  | 8,696,060 |  |  | 1,242,058 |  |  | (594,543) |  |  | 647,515 |  |  | (484,319) |  |  | 163,196 |
Foreign exchange contracts |  | 214,855 |  |  | 211,233 |  |  | — |  |  | 211,233 |  |  | (7) |  |  | 211,226 |
Equity option contracts |  | 21,102 |  |  | 193 |  |  | — |  |  | 193 |  |  | — |  |  | 193 |
Total customer risk management programs |  | 11,561,139 |  |  | 1,612,300 |  |  | (594,543) |  |  | 1,017,757 |  |  | (484,326) |  |  | 533,431 |
Trading |  | 14,038,906 |  |  | 94,958 |  |  | (74,647) |  |  | 20,311 |  |  | (423) |  |  | 19,888 |
Internal risk management programs |  | 178,806 |  |  | 1,594 |  |  | (13) |  |  | 1,581 |  |  | — |  |  | 1,581 |
Total derivative contracts |  | $ | 25,778,851 |  |  | $ | 1,708,852 |  |  | $ | (669,203) |  |  | $ | 1,039,649 |  |  | $ | (484,749) |  |  | $ | 554,900 |
1 Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract. The following summarizes the pre-tax net gains (losses) on derivative instruments and where they are recorded in the income statement (in thousands):
|  | Three Months Ended
|  | June 30, 2023 |  | June 30, 2022
|  | Brokerage and Trading Revenue |  | Gain (Loss) on Derivatives, Net |  | Brokerage and Trading Revenue |  | Gain (Loss) on Derivatives, Net
Customer risk management programs: |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 2,339 |  |  | $ | — |  |  | $ | 939 |  |  | $ | — |
Energy contracts |  | 11,250 |  |  | — |  |  | 12,036 |  |  | — |
Foreign exchange contracts |  | 53 |  |  | — |  |  | 158 |  |  | — |
Equity option contracts |  | — |  |  | — |  |  | — |  |  | — |
Total customer risk management programs |  | 13,642 |  |  | — |  |  | 13,133 |  |  | — |
Trading 1 |  | 64,172 |  |  | — |  |  | (15,376) |  |  | — |
Internal risk management programs |  | — |  |  | (8,159) |  |  | — |  |  | (13,569) |
Total derivative contracts |  | $ | 77,814 |  |  | $ | (8,159) |  |  | $ | (2,243) |  |  | $ | (13,569) |
1 Represents changes in fair value of to-be-announced securities and other derivative instruments held to mitigate market risk of trading securities portfolio, which is offset by changes in fair value of trading securities also included in Brokerage and Trading Revenue in the Consolidated Statements of Earnings.
|  | Six Months Ended
|  | June 30, 2023 |  | June 30, 2022
|  | Brokerage and Trading Revenue |  | Gain (Loss) on Derivatives, Net |  | Brokerage and Trading Revenue |  | Gain (Loss) on Derivatives, Net
Customer risk management programs: |  |  |  |  |  |  |  |
Interest rate contracts |  | 4,109 |  |  | — |  |  | 7,281 |  |  | — |
Energy contracts |  | 17,803 |  |  | — |  |  | 16,484 |  |  | — |
Foreign exchange contracts |  | 84 |  |  | — |  |  | 306 |  |  | — |
Equity option contracts |  | — |  |  | — |  |  | — |  |  | — |
Total customer risk management programs |  | 21,996 |  |  | — |  |  | 24,071 |  |  | — |
Trading 1 |  | 1,079 |  |  | — |  |  | 15,698 |  |  | — |
Internal risk management programs |  | — |  |  | (9,503) |  |  | — |  |  | (60,550) |
Total derivative contracts |  | $ | 23,075 |  |  | $ | (9,503) |  |  | $ | 39,769 |  |  | $ | (60,550) |
1 Represents changes in fair value of to-be-announced securities and other derivative instruments held to mitigate market risk of trading securities portfolio, which is offset by changes in fair value of trading securities also included in Brokerage and Trading Revenue in the Consolidated Statements of Earnings.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentDetailAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration