Company: BOKF
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000875357-25-000013
Chunk: 71

Company: BOK FINANCIAL CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 71
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 is as follows (in thousands):Balance, December 31, 2021$163,198 Additions18,215 Acquisitions47,675 Change in fair value due to principal payments(31,741)Change in fair value due to market assumption changes80,261 Balance, December 31, 2022277,608 Additions12,142 Acquisitions34,593 Change in fair value due to principal payments(27,344)Change in fair value due to market assumption changes(3,115)Balance, December 31, 2023293,884 Additions14,976 Acquisitions41,655 Change in fair value due to principal payments(30,807)Change in fair value due to market assumption changes18,437 Balance, December 31, 2024$338,145 Changes in the fair value of mortgage servicing rights due to market changes are included in Other operating revenue in the Consolidated Statements of Earnings. Changes in fair value due to loan runoff are included in Mortgage banking costs. Mortgage servicing rights are not traded in active markets. Fair value is determined by discounting the projected net cash flows. Significant assumptions used to determine fair value considered to be significant unobservable inputs were as follows:December 31, 20242023Discount rate – risk-free rate plus a market premium9.60%9.72%Prepayment rate - based upon loan interest rate, original term, and loan type7.09%7.34%Loan servicing costs – annually per loan based upon loan type:Performing loans$73 - $94$69 - $94Delinquent loans$150 - $500$150 - $500Loans in foreclosure$875 - $6,000$875 - $8,000Primary/secondary mortgage rate spread115 bps105 bpsEscrow earnings rate – indexed to rates paid on deposit accounts with a comparable average life4.44%3.90%Delinquency rate2.19%2.06%Changes in primary residential mortgage interest rates directly affect the prepayment speeds used in valuing our mortgage servicing rights. A separate third-party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors. The prepayment model is updated periodically for changes in market conditions and adjusted to better correlate with actual performance of BOK Financial’s servicing portfolio.

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