Related Parties

In compliance with applicable banking regulations, the Company may extend credit to certain executive officers, directors, principal shareholders and their affiliates (collectively referred to as “related parties”) in the ordinary course of business. The Company’s loans to related parties do not involve more than the normal credit risk and there are no nonaccruing or impaired related party loans outstanding at December 31, 2016 or 2015.

Activity in loans to related parties is summarized as follows (in thousands):



	Year Ended December 31,
	2016			2015
Beginning balance	$	594,225		$	103,395
Advances	884,511			3,582,384
Payments	(1,123,747		)	(3,104,004		)
Adjustments¹	(218,044		)	12,450
Ending balance	$	136,945		$	594,225


¹	Adjustments generally consist of changes in status as a related party.

As defined by banking regulations, loan commitments and equity investments to a single affiliate may not exceed 10% of unimpaired capital and surplus and loan commitments and equity investments to all affiliates may not exceed 20% of unimpaired capital and surplus. All loans to affiliates must be fully secured by eligible collateral. At December 31, 2016, loan commitments and equity investments were limited to $287 million to a single affiliate and $573 million to all affiliates. The largest loan commitment and equity investment to a single affiliate was $220 million and the aggregate loan commitments and equity investments to all affiliates were $337 million. The largest outstanding amount to a single affiliate at December 31, 2016 was $24 million and the total outstanding amounts to all affiliates were $39 million. At December 31, 2015, total loan commitments and equity investments to all affiliates were $330 million and the total outstanding amounts to all affiliates were $244 million.

Certain related parties are customers of the Company for services other than loans, including consumer banking, corporate banking, risk management, wealth management, brokerage and trading, or fiduciary/trust services. The Company engages in transactions with related parties in the ordinary course of business in compliance with applicable regulations.

The Company rents office space in facilities owned by affiliates of Mr. Kaiser, its Chairman and principal shareholder. Lease payments totaled $1.1 million for 2016, $975 thousand for 2015 and $1.1 million for 2014.

During 2016, the Company agreed to purchase approximately $7.5 million of Oklahoma Historic State Income Tax Credits from the George Kaiser Family Foundation, a principal shareholder of BOKF. In the fourth quarter, $3.8 million of these tax credits were purchased and reduced the Company's state liability for 2016. The remaining credits when purchased will be used to reduce the Company's state income tax liability in 2017.

Cavanal Hill Investment Management, Inc., a wholly-owned subsidiary of BOKF, NA, is the administrator to and investment advisor for the Cavanal Hill Funds (the "Funds"), a diversified, open-ended investment company established as a business trust under the Investment Company Act of 1940 (the "1940 Act"). BOKF, NA is custodian and BOK Financial Securities, Inc. is distributor for the Funds. The Funds’ products are offered to customers, employee benefit plans, trusts and the general public in the ordinary course of business. Approximately 94% of the Funds’ assets of $3.8 billion are held for the Company's clients. A Company executive officer serves on the Funds' board of trustees and officers of BOKF, NA serve as president and secretary of the Funds. A majority of the members of the Funds’ board of trustees are, however, independent of the Company and the Funds are managed by its board of trustees.