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Derivatives
 6 Months Ended
Jun. 30, 2018
Derivative Instrument Detail [Abstract]  
Derivatives [Text Block]
Derivatives
 
Derivative instruments may be used by the Company as part of its internal risk management programs or may be offered to customers. All derivative instruments are carried at fair value and changes in fair value are reported in earnings as they occur. Credit risk is also considered in determining fair value. Deterioration in the credit rating of customer or other counterparties reduced the fair value of asset contracts. Deterioration of our credit rating could decrease the fair value of our derivative liabilities.

When bilateral netting agreements or similar arrangements 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 derivative contract type by counterparty basis.

Derivative contracts may 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. In addition, derivative contracts executed with customers under Customer Risk Management Programs may be secured by non-cash collateral in conjunction with a credit agreement with that customer. Access to collateral in the event of default is reasonably assured.
 
None of these derivative contracts have been designated as hedging instruments for accounting purposes.

Customer Risk Management Programs
 
BOK Financial offers programs to permit its customers to manage various risks, including fluctuations in energy, cattle and other agricultural products, interest rates and foreign exchange rates with derivative contracts. Customers may also manage interest rate risk through interest rate swaps used by borrowers to modify interest rate terms of their loans or to-be-announced securities used by mortgage banking customers to hedge their loan production. Derivative contracts are executed between the customers and BOK Financial. Offsetting contracts are executed between BOK Financial and other selected counterparties to minimize the risk of changes in commodity prices, interest rates or foreign exchange rates. The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to BOK Financial as profit and compensation for administrative costs and credit risk which is recognized over the life of the contracts and included in Other operating revenue – Brokerage and trading revenue in the Consolidated Statements of Earnings.
 
Internal Risk Management Programs
 
BOK Financial may use derivative contracts in managing its interest rate sensitivity, as part of its economic hedge of the change in the fair value of mortgage servicing rights and to mitigate the market risk of holding trading securities. Changes in the fair value of derivative instruments used in managing interest rate sensitivity and as part of the economic hedge of changes in the fair value of mortgage servicing rights are included in Other operating revenue – Gain (loss) on derivatives, net in the Consolidated Statements of Earnings. Changes in the fair value of derivative instruments used to mitigate the market risk of holding trading securities are included in Other operating revenue – Brokerage and trading revenue.

As discussed in Note 6, 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 6 for additional discussion of notional, fair value and impact on earnings of these contracts.
The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at June 30, 2018 (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
 
$
15,027,678

 
$
52,681

 
$
(17,382
)
 
$
35,299

 
$
—

 
$
35,299

Interest rate swaps
 
1,745,237

 
43,040

 
(2,193
)
 
40,847

 
(11,737
)
 
29,110

Energy contracts
 
1,465,826

 
200,640

 
(69,991
)
 
130,649

 
—

 
130,649

Agricultural contracts
 
23,508

 
1,164

 
(181
)
 
983

 
(741
)
 
242

Foreign exchange contracts
 
174,851

 
170,556

 
—

 
170,556

 
(290
)
 
170,266

Equity option contracts
 
93,943

 
4,121

 
—

 
4,121

 
(660
)
 
3,461

Total customer risk management programs
 
18,531,043

 
472,202

 
(89,747
)
 
382,455

 
(13,428
)
 
369,027

Internal risk management programs
 
9,672,639

 
14,760

 
(10,413
)
 
4,347

 
—

 
4,347

Total derivative contracts
 
$
28,203,682

 
$
486,962

 
$
(100,160
)
 
$
386,802

 
$
(13,428
)
 
$
373,374

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
14,443,478

 
$
49,343

 
$
(17,382
)
 
$
31,961

 
$
(31,808
)
 
$
153

Interest rate swaps
 
1,745,237

 
43,043

 
(2,193
)
 
40,850

 
(4,946
)
 
35,904

Energy contracts
 
1,434,980

 
199,119

 
(69,990
)
 
129,129

 
(112,481
)
 
16,648

Agricultural contracts
 
23,496

 
1,142

 
(181
)
 
961

 
—

 
961

Foreign exchange contracts
 
161,567

 
157,174

 
(1
)
 
157,173

 
(517
)
 
156,656

Equity option contracts
 
93,943

 
4,121

 
—

 
4,121

 
—

 
4,121

Total customer risk management programs
 
17,902,701

 
453,942

 
(89,747
)
 
364,195

 
(149,752
)
 
214,443

Internal risk management programs
 
11,648,514

 
30,826

 
(10,413
)
 
20,413

 
—

 
20,413

Total derivative contracts
 
$
29,551,215

 
$
484,768

 
$
(100,160
)
 
$
384,608

 
$
(149,752
)
 
$
234,856

1 
Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract.


The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at December 31, 2017 (in thousands):

 
 
Assets
 
 
Notional 1
 
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
 
$
12,347,542

 
$
23,606

 
$
(18,096
)
 
$
5,510

 
$
—

 
$
5,510

Interest rate swaps
 
1,478,944

 
28,278

 
—

 
28,278

 
(4,964
)
 
23,314

Energy contracts
 
1,190,067

 
103,044

 
(47,873
)
 
55,171

 
(196
)
 
54,975

Agricultural contracts
 
53,238

 
1,576

 
(960
)
 
616

 
—

 
616

Foreign exchange contracts
 
132,397

 
129,551

 
—

 
129,551

 
(448
)
 
129,103

Equity option contracts
 
99,633

 
5,503

 
—

 
5,503

 
(920
)
 
4,583

Total customer risk management programs
 
15,301,821

 
291,558

 
(66,929
)
 
224,629

 
(6,528
)
 
218,101

Internal risk management programs
 
4,736,701

 
9,494

 
(7,093
)
 
2,401

 
—

 
2,401

Total derivative contracts
 
$
20,038,522

 
$
301,052

 
$
(74,022
)
 
$
227,030

 
$
(6,528
)
 
$
220,502

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
Notional 1
 
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
 
$
11,537,742

 
$
20,367

 
$
(18,096
)
 
$
2,271

 
$
(704
)
 
$
1,567

Interest rate swaps
 
1,478,944

 
28,298

 
—

 
28,298

 
(12,896
)
 
15,402

Energy contracts
 
1,166,924

 
101,603

 
(47,873
)
 
53,730

 
(42,767
)
 
10,963

Agricultural contracts
 
48,552

 
1,551

 
(960
)
 
591

 
—

 
591

Foreign exchange contracts
 
126,251

 
123,321

 
—

 
123,321

 
(53
)
 
123,268

Equity option contracts
 
99,633

 
5,503

 
—

 
5,503

 
—

 
5,503

Total customer risk management programs
 
14,458,046

 
280,643

 
(66,929
)
 
213,714

 
(56,420
)
 
157,294

Internal risk management programs
 
5,728,421

 
21,762

 
(7,093
)
 
14,669

 
—

 
14,669

Total derivative contracts
 
$
20,186,467

 
$
302,405

 
$
(74,022
)
 
$
228,383

 
$
(56,420
)
 
$
171,963

1 
Notional amounts for commodity contracts are converted into dollar-equivalent amounts based on dollar prices at the inception of the contract.




The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at June 30, 2017 (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
 
$
16,174,687

 
$
57,948

 
$
(29,034
)
 
$
28,914

 
$
—

 
$
28,914

Interest rate swaps
 
1,450,193

 
29,932

 
—

 
29,932

 
(2,206
)
 
27,726

Energy contracts
 
891,480

 
56,824

 
(20,546
)
 
36,278

 
(21,267
)
 
15,011

Agricultural contracts
 
45,250

 
3,541

 
(1,027
)
 
2,514

 
—

 
2,514

Foreign exchange contracts
 
169,529

 
162,429

 
—

 
162,429

 
(7
)
 
162,422

Equity option contracts
 
100,159

 
4,437

 
—

 
4,437

 
(920
)
 
3,517

Total customer risk management programs
 
18,831,298

 
315,111

 
(50,607
)
 
264,504

 
(24,400
)
 
240,104

Internal risk management programs
 
10,680,498

 
40,185

 
—

 
40,185

 
—

 
40,185

Total derivative contracts
 
$
29,511,796

 
$
355,296

 
$
(50,607
)
 
$
304,689

 
$
(24,400
)
 
$
280,289

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
16,174,687

 
$
53,829

 
$
(29,034
)
 
$
24,795

 
$
—

 
$
24,795

Interest rate swaps
 
1,450,193

 
29,982

 
—

 
29,982

 
(15,396
)
 
14,586

Energy contracts
 
874,625

 
53,895

 
(20,546
)
 
33,349

 
—

 
33,349

Agricultural contracts
 
45,262

 
3,538

 
(1,027
)
 
2,511

 
(2,511
)
 
—

Foreign exchange contracts
 
169,553

 
162,276

 
—

 
162,276

 
(3,188
)
 
159,088

Equity option contracts
 
100,159

 
4,437

 
—

 
4,437

 
—

 
4,437

Total customer risk management programs
 
18,814,479

 
307,957

 
(50,607
)
 
257,350

 
(21,095
)
 
236,255

Internal risk management programs
 
8,310,950

 
49,564

 
—

 
49,564

 
—

 
49,564

Total derivative contracts
 
$
27,125,429

 
$
357,521

 
$
(50,607
)
 
$
306,914

 
$
(21,095
)
 
$
285,819

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 income statement (in thousands):
 
 
Three Months Ended
 
 
June 30, 2018
 
June 30, 2017
 
 
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
 
$
7,586

 
$
—

 
$
9,205

 
$
—

Interest rate swaps
 
683

 
—

 
665

 
—

Energy contracts
 
1,416

 
—

 
1,666

 
—

Agricultural contracts
 
15

 
—

 
11

 
—

Foreign exchange contracts
 
96

 
—

 
90

 
—

Equity option contracts
 
—

 
—

 
—

 
—

Total customer risk management programs
 
9,796

 
—

 
11,637

 
—

Internal risk management programs
 
(981
)
 
(3,057
)
 
6,485

 
3,241

Total derivative contracts
 
$
8,815

 
$
(3,057
)
 
$
18,122

 
$
3,241


 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
June 30, 2018
 
June 30, 2017
 
 
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
 
$
14,405

 
$
—

 
$
17,232

 
$
—

Interest rate swaps
 
1,439

 
—

 
1,124

 
—

Energy contracts
 
4,556

 
—

 
4,539

 
—

Agricultural contracts
 
30

 
—

 
20

 
—

Foreign exchange contracts
 
272

 
—

 
360

 
—

Equity option contracts
 
—

 
—

 
—

 
—

Total customer risk management programs
 
20,702

 
—

 
23,275

 
—

Internal risk management programs
 
(2,864
)
 
(8,742
)
 
6,018

 
2,791

Total derivative contracts
 
$
17,838

 
$
(8,742
)
 
$
29,293

 
$
2,791