Company: BOKF
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000875357-25-000045
Chunk: 5

Company: BOK FINANCIAL CORP
Filing Date: 2025-07-30
Form: 10-Q
Item: Part I, Item 2
Chunk 5
---
 equity securities increased $42 million.

Total average deposits decreased $222 million compared to the first quarter of 2025, including a $198 million decrease in demand deposits and a $25 million decrease in interest-bearing deposits. Average funds purchased and repurchase agreements decreased $154 million, while average other borrowings increased $1.4 billion.

Net interest margin was 2.80% compared to 2.78% in the first quarter of 2025. For the second quarter of 2025, our core net interest margin excluding trading activities1, a non-GAAP measure, was 3.12% compared to 3.05% in the prior quarter. The tax-equivalent yield on earning assets was 5.47%, an increase of 2 basis points. The yield on the AFS securities portfolio increased 7 basis points to 3.89%. Loan yields were unchanged at 6.71%. The yield on trading securities decreased 2 basis points to 5.05%. The yield on fair value option securities increased 218 basis points to 5.90% and the yield on restricted equity securities expanded 22 basis points to 7.73%.

Funding costs were 3.40%, a 2 basis point decrease compared to the prior quarter. The cost of interest-bearing deposits decreased 7 basis points to 3.17%. The cost of funds purchased and repurchase agreements increased 45 basis points to 3.50% while the cost of other borrowings decreased 8 basis points to 4.49%. The cost of subordinated debentures was down 6 basis points to 6.38%. All outstanding subordinated debentures were called during the second quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 73 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 82% 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