Company: BOKF
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000875357-25-000045
Chunk: 17

Company: BOK FINANCIAL CORP
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 2
Chunk 17
---
 Capital for further discussion of the changes.

- 16 -

Financial Condition

Securities

We maintain a securities portfolio to enhance profitability, manage interest rate risk, provide liquidity, and comply with regulatory requirements. Securities are classified as trading, investment (held-to-maturity), or available-for-sale. See Note 2 to the Consolidated Financial Statements for the composition of the securities portfolio as of June 30, 2025, and December 31, 2024.

We hold an inventory of trading securities in support of sales to a variety of customers, including banks, corporations, insurance companies, money managers, and others. Trading securities decreased $292 million to $5.6 billion during the second quarter of 2025. As discussed in the Market Risk section of this report, trading activities involve risk of loss from adverse price movement. We mitigate this risk within board-approved limits through the use of derivative contracts, short-sales, and other techniques.

At June 30, 2025, the carrying value of investment securities was $1.9 billion, including a $196 thousand allowance for expected credit losses, compared to $2.0 billion at March 31, 2025, with a $193 thousand allowance for expected credit losses. The fair value of investment securities was $1.8 billion at June 30, 2025, a $38 million decrease compared to the prior quarter. Investment securities consist primarily of residential mortgage-backed securities issued by U. S. government agencies, intermediate and long-term, fixed-rate Oklahoma and Texas municipal bonds, and taxable Texas school construction bonds.

AFS securities, which may be sold prior to maturity, are carried at fair value. Unrealized gains or losses, net of deferred taxes, are recorded as accumulated other comprehensive income in shareholders' equity. The amortized cost of AFS securities totaled $13.6 billion at June 30, 2025, a $158 million increase compared to March 31, 2025. At June 30, 2025, the AFS securities portfolio consisted primarily of U. S. government agency residential mortgage-backed securities and U. S. government agency commercial mortgage-backed securities. Both residential and commercial mortgage-backed securities have credit risk from delinquency or default of the underlying loans. We mitigate this risk by primarily investing in securities issued by U. S. government agencies. Principal and interest payments on the underlying loans are fully guaranteed. Commercial mortgage-backed securities have prepayment penalties similar to commercial loans.

A primary risk of holding residential mortgage-backed securities