Company: BOKF
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000875357-25-000013
Chunk: 3

Company: BOK FINANCIAL CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7A
Chunk 3
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 result. The Board has approved a $20 million market risk limit for mortgage servicing rights, net of economic hedges. 

Table 34 - MSR Asset and Hedge Sensitivity Analysis 

(In thousands)

December 31, 20242023Up 50 bpDown 50 bpUp 50 bpDown 50 bpMSR Asset$9,730 $(11,956)$7,974 $(9,877)MSR Hedge(12,269)12,537 (8,444)8,606 Net Exposure$(2,539)$581 $(470)$(1,271)

Trading Activities

The Company bears market risk by originating residential mortgages held for sale. RMHFS are generally outstanding for 60 to 90 days, which represents the typical period from commitment to originate a loan to sale of the closed loan to an investor. Primary mortgage interest rate changes during this period affect the value of RMHFS commitments and loans. We use forward sale contracts to mitigate market risk on all closed mortgage loans held for sale and on an estimate of mortgage loan commitments that are expected to result in closed loans. 

A variety of methods are used to monitor market risk of mortgage origination activities. These methods include daily marking of all positions to market value, independent verification of inventory pricing and revenue sensitivity limits. 

Management performs a stress test to measure market risk due to changes in interest rates inherent in the mortgage production pipeline. The stress test shocks applicable interest rates up and down 50 basis points and calculates an estimated change in fair value, net of economic hedging activity that may result. The Board has approved a $3 million market risk limit for the mortgage production pipeline, net of forward sale contracts. 

Table 35 - Mortgage Pipeline Sensitivity Analysis 

(In thousands)

Year EndedDecember 31, 20242023Up 50 bpDown 50 bpUp 50 bpDown 50 bpAverage1$(87)$(63)$(61)$(38)Low293 126 49 61 High3(316)(241)(186)(168)Period End(96)(117)14 (41)

1     Average represents the simple average of each daily value observed during the reporting period. 

2    Low represents least risk of loss in fair value measured as the smallest negative value or the largest positive value observed daily during the reporting period.

3    High represents the greatest risk of loss in fair value measured as the largest negative value or the smallest positive value observed daily during the reporting period