Company: BOKF
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000875357-25-000027
Chunk: 25

Company: BOK FINANCIAL CORP
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 2
Chunk 25
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2025, the net fair value of derivative contracts, before consideration of cash margin, reported as assets under these programs totaled $428 million compared to $242 million at December 31, 2024. At March 31, 2025, the net fair value of our derivative contracts included $312 million for energy contracts, $61 million for foreign exchange contracts, and $55 million for interest rate swaps. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $386 million at March 31, 2025, and $205 million at December 31, 2024.

At March 31, 2025, total derivative assets were reduced by $59 million of cash collateral received from counterparties and total derivative liabilities were reduced by $215 million of cash collateral paid to counterparties related to instruments executed with the same counterparty under a master netting agreement. Derivative contracts executed with customers may be secured by non-cash collateral in conjunction with a credit agreement with that customer, such as proven producing oil and gas properties. Access to this collateral in an event of default is reasonably assured.

A table showing the notional and fair value of derivative assets and liabilities on both a gross and net basis is presented in Note 3 to the Consolidated Financial Statements.

The fair value of derivative contracts reported as assets under these programs, net of cash margin held by the Company, by category of debtor at March 31, 2025, follows in Table 15.

Table 15 - Fair Value of Derivative Contracts

(In thousands)

  Exchanges and clearing organizations                                                279,896  
  Customers                                                                            46,320  
  Banks and other financial institutions                                               42,839  
  Fair value of customer risk management program asset derivative contracts, net      369,055  

At March 31, 2025, our largest derivative exposure was to an exchange for $74 million of net energy derivative positions and $93 million of cash margin placed with the exchange.

Our customer hedging program also introduces liquidity and capital risk. We are required to provide cash margin to certain counterparties when the net negative fair value of the contracts exceeds established limits which may incur additional funding costs. Also, changes in commodity prices affect risk-weighted assets and total assets which in turn impacts regulatory capital ratios. These risks are modeled as part of the management of these programs. Based on current prices, a decrease in market prices to an equivalent of $56.36 per barrel of oil