Company: BOKF
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0000875357-25-000057
Chunk: 5

Company: BOK FINANCIAL CORP
Filing Date: 2025-10-29
Form: 10-Q
Item: Part I, Item 2
Chunk 5
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 of other borrowings increased 5 basis points to 4.54%. The cost of subordinated debentures was down 638 basis points as all outstanding subordinated debentures were called during the second quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 71 basis points, a decrease of 2 basis points.

Our overall objective is to manage the Company's balance sheet for changes in interest rates as is further described in the Market Risk section of this report. Approximately 84% of our commercial and commercial real estate loan portfolios are either variable rate or fixed rate that will reprice within one year. These loans are funded primarily by deposit accounts that are either non-interest bearing, or that reprice more slowly than the loans. The result is a balance sheet that is asset sensitive, which means that assets generally reprice more quickly than the liabilities. One of the strategies that we use to manage toward a relative rate-neutral position is to purchase fixed-rate residential mortgage-backed securities issued primarily by U. S. government agencies and fund them with market rate-sensitive liabilities. The liability-sensitive nature of this strategy provides an offset to the asset-sensitive characteristics of our loan portfolio. We also may use derivative instruments to manage our interest rate risk.

The effectiveness of these strategies is reflected in the overall change in net interest income due to changes in interest rates as shown in Table 1 and in the interest rate sensitivity projections as shown in the Market Risk section of this report.

1 See Explanation and Reconciliation of Non-GAAP Measures in "Non-GAAP Measures" section following.

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Table 1 - Volume/Rate Analysis

(In thousands)

                                                             Three Months Ended                                                                                          
                                                  Sep. 30, 2025 / June 30, 2025                                                                                          
                                                                         Change                                  Yield/Rate                                              
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Tax-equivalent interest revenue:                                                                                                                                       
  Interest-bearing cash and cash equivalents                                  $         (144)          (91)               $        (4,575)         (833)        (3,742)  
  Trading securities                                                                 (13,718)      (16,896)                         13,475        16,199        (2,724)  
  Investment securities                                                   (202)                                           1        (2,519)       (2,478)                 
  Available-for-sale securities                                                         2,092                                       29,321         7,225