Derivatives [Text Block] |
(3) Derivatives The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at December 31, 2014 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | Notional1 | | Gross Fair Value | | Netting Adjustments | | Net Fair Value Before Cash Collateral | | Cash Collateral | | Fair Value Net of Cash Collateral | Customer risk management programs: | | | | | | | | | | | | | Interest rate contracts | | | | | | | | | | | | | To-be-announced residential mortgage-backed securities | | $ | 13,313,615 |
| | $ | 94,719 |
| | $ | (39,359 | ) | | $ | 55,360 |
| | $ | — |
| | $ | 55,360 |
| Interest rate swaps | | 1,165,568 |
| | 35,405 |
| | — |
| | 35,405 |
| | — |
| | 35,405 |
| Energy contracts | | 579,801 |
| | 141,166 |
| | (48,624 | ) | | 92,542 |
| | (71,310 | ) | | 21,232 |
| Agricultural contracts | | 47,657 |
| | 1,904 |
| | (1,256 | ) | | 648 |
| | — |
| | 648 |
| Foreign exchange contracts | | 290,965 |
| | 238,395 |
| | — |
| | 238,395 |
| | — |
| | 238,395 |
| Equity option contracts | | 194,960 |
| | 10,834 |
| | — |
| | 10,834 |
| | — |
| | 10,834 |
| Total customer risk management programs | | 15,592,566 |
| | 522,423 |
| | (89,239 | ) | | 433,184 |
| | (71,310 | ) | | 361,874 |
| Interest rate risk management programs | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Total derivative contracts | | $ | 15,592,566 |
| | $ | 522,423 |
| | $ | (89,239 | ) | | $ | 433,184 |
| | $ | (71,310 | ) | | $ | 361,874 |
| | | | | | | | | | | | | | | | Liabilities | | | Notional¹ | | Gross Fair Value | | Netting Adjustments | | Net Fair Value Before Cash Collateral | | Cash Collateral | | Fair Value Net of Cash Collateral | Customer risk management programs: | | | | | | | | | | | | | Interest rate contracts | | | | | | | | | | | | | To-be-announced residential mortgage-backed securities | | $ | 13,471,880 |
| | $ | 91,949 |
| | $ | (39,359 | ) | | $ | 52,590 |
| | $ | (52,290 | ) | | $ | 300 |
| Interest rate swaps | | 1,165,568 |
| | 35,599 |
| | — |
| | 35,599 |
| | (18,717 | ) | | 16,882 |
| Energy contracts | | 579,801 |
| | 142,839 |
| | (48,624 | ) | | 94,215 |
| | — |
| | 94,215 |
| Agricultural contracts | | 47,418 |
| | 1,908 |
| | (1,256 | ) | | 652 |
| | (596 | ) | | 56 |
| Foreign exchange contracts | | 290,856 |
| | 238,118 |
| | — |
| | 238,118 |
| | (6,703 | ) | | 231,415 |
| Equity option contracts | | 194,960 |
| | 10,834 |
| | — |
| | 10,834 |
| | — |
| | 10,834 |
| Total customer risk management programs | | 15,750,483 |
| | 521,247 |
| | (89,239 | ) | | 432,008 |
| | (78,306 | ) | | 353,702 |
| Interest rate risk management programs | | 47,000 |
| | 852 |
| | — |
| | 852 |
| | — |
| | 852 |
| Total derivative contracts | | $ | 15,797,483 |
| | $ | 522,099 |
| | $ | (89,239 | ) | | $ | 432,860 |
| | $ | (78,306 | ) | | $ | 354,554 |
|
| | 1 | Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract. |
When bilateral netting agreements exist between the Company and its counterparties that create a single legal claim or obligation to pay or receive the net amount in settlement of the individual derivative contracts, the Company reports derivative assets and liabilities on a net by counterparty basis.
Derivative contracts may also require the Company to provide or receive cash margin as collateral for derivative assets and liabilities. Derivative assets and liabilities are reported net of cash margin when certain conditions are met. As of December 31, 2014, a decrease in credit rating to below investment grade would increase our obligation to post cash margin on existing contracts by approximately $19 million. The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at December 31, 2013 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | Notional1 | | Gross Fair Value | | Netting Adjustments | | Net Fair Value Before Cash Collateral | | Cash Collateral | | Fair Value Net of Cash Collateral | Customer risk management programs: | | | | | | | | | | | | | Interest rate contracts | | | | | | | | | | | | | To-be-announced residential mortgage-backed securities | | $ | 10,817,159 |
| | $ | 102,921 |
| | $ | (46,623 | ) | | $ | 56,298 |
| | $ | — |
| | $ | 56,298 |
| Interest rate swaps | | 1,283,379 |
| | 44,124 |
| | — |
| | 44,124 |
| | (731 | ) | | 43,393 |
| Energy contracts | | 1,263,266 |
| | 48,078 |
| | (29,957 | ) | | 18,121 |
| | (2,575 | ) | | 15,546 |
| Agricultural contracts | | 100,886 |
| | 2,060 |
| | (1,166 | ) | | 894 |
| | — |
| | 894 |
| Foreign exchange contracts | | 136,543 |
| | 136,543 |
| | — |
| | 136,543 |
| | (2,147 | ) | | 134,396 |
| Equity option contracts | | 210,816 |
| | 17,957 |
| | — |
| | 17,957 |
| | (3,472 | ) | | 14,485 |
| Total customer risk management programs | | 13,812,049 |
| | 351,683 |
| | (77,746 | ) | | 273,937 |
| | (8,925 | ) | | 265,012 |
| Interest rate risk management programs | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Total derivative contracts | | $ | 13,812,049 |
| | $ | 351,683 |
| | $ | (77,746 | ) | | $ | 273,937 |
| | $ | (8,925 | ) | | $ | 265,012 |
| | | | | | | | | | | | | | | | Liabilities | | | Notional¹ | | Gross Fair Value | | Netting Adjustments | | Net Fair Value Before Cash Collateral | | Cash Collateral | | Fair Value Net of Cash Collateral | Customer risk management programs: | | | | | | | | | | | | | Interest rate contracts | | | | | | | | | | | | | To-be-announced residential mortgage-backed securities | | $ | 10,982,049 |
| | $ | 99,830 |
| | $ | (46,623 | ) | | $ | 53,207 |
| | $ | — |
| | $ | 53,207 |
| Interest rate swaps | | 1,283,379 |
| | 44,377 |
| | — |
| | 44,377 |
| | (17,853 | ) | | 26,524 |
| Energy contracts | | 1,216,426 |
| | 46,095 |
| | (29,957 | ) | | 16,138 |
| | (6,055 | ) | | 10,083 |
| Agricultural contracts | | 99,191 |
| | 2,009 |
| | (1,166 | ) | | 843 |
| | — |
| | 843 |
| Foreign exchange contracts | | 135,237 |
| | 135,237 |
| | — |
| | 135,237 |
| | (294 | ) | | 134,943 |
| Equity option contracts | | 210,816 |
| | 17,957 |
| | — |
| | 17,957 |
| | — |
| | 17,957 |
| Total customer risk management programs | | 13,927,098 |
| | 345,505 |
| | (77,746 | ) | | 267,759 |
| | (24,202 | ) | | 243,557 |
| Interest rate risk management programs | | 47,000 |
| | 3,628 |
| | — |
| | 3,628 |
| | — |
| | 3,628 |
| Total derivative contracts | | $ | 13,974,098 |
| | $ | 349,133 |
| | $ | (77,746 | ) | | $ | 271,387 |
| | $ | (24,202 | ) | | $ | 247,185 |
|
| | 1 | Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract. |
The following summarizes the pre-tax net gains (losses) on derivative instruments and where they are recorded in the Consolidated Statement of Earnings (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | | 2014 | | 2013 | | 2012 | | | Brokerage and Trading Revenue | | Gain (Loss) on Derivatives, Net | | Brokerage and Trading Revenue | | Gain (Loss) on Derivatives, Net | | Brokerage and Trading Revenue | | Gain (Loss) on Derivatives, Net | Customer risk management programs: | | | | | | | | | | | | | Interest rate contracts | | | | | | | | | | | | | To-be-announced residential mortgage-backed securities | | $ | 27,007 |
| | $ | — |
| | $ | 29,614 |
| | $ | — |
| | $ | 25,509 |
| | $ | — |
| Interest rate swaps | | 2,494 |
| | — |
| | 2,991 |
| | — |
| | 3,458 |
| | — |
| Energy contracts | | 6,572 |
| | — |
| | 8,303 |
| | — |
| | 8,171 |
| | — |
| Agricultural contracts | | 146 |
| | — |
| | 357 |
| | — |
| | 382 |
| | — |
| Foreign exchange contracts | | 1,581 |
| | — |
| | 687 |
| | — |
| | 612 |
| | — |
| Equity option contracts | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Total customer risk management programs | | 37,800 |
| | — |
| | 41,952 |
| | — |
| | 38,132 |
| | — |
| Interest rate risk management programs | | — |
| | 2,776 |
| | — |
| | (4,367 | ) | | — |
| | (301 | ) | Total derivative contracts | | $ | 37,800 |
| | $ | 2,776 |
| | $ | 41,952 |
| | $ | (4,367 | ) | | $ | 38,132 |
| | $ | (301 | ) |
At December 31, 2014, BOK Financial had interest rate swaps with a notional value of $47 million used as part of the economic hedge of the change in the fair value of mortgage servicing rights.
As discussed in Note 7, certain derivative contracts not designated as hedging instruments related to mortgage loan commitments and forward sales contracts are included in Residential mortgage loans held for sale on the Consolidated Balance Sheets. See Note 7 for additional discussion of notional, fair value and impact on earnings of these contracts. Forward sales contracts are not considered swaps under the Commodity and Futures Trading Commission final rules.
None of these derivative contracts have been designated as hedging instruments. |