~~0000875357bokf:ConsumerMemberbokf:MerchantservicesrevenueMemberus-gaap:OperatingSegmentsMember2020-01-012020-06-30~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2021


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ______________

Commission File No. 0-19341

BOK FINANCIAL CORP

(Exact name of registrant as specified in its charter)


Oklahoma		73-1373454
(State or other jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

Bank of Oklahoma Tower
Boston Avenue at Second Street
Tulsa,	Oklahoma	74192
(Address of Principal Executive Offices)		(Zip Code)

(918) 588-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~69,078,458~~68,596,764 shares of common stock ($.00006 par value) as of ~~June~~September 30, 2021.

BOK Financial Corporation

Form 10-Q

Quarter Ended ~~June~~September 30, 2021

Index


Part I. Financial Information
Management’s Discussion and Analysis (Item 2)			1
Market Risk (Item 3)			3938
Controls and Procedures (Item 4)			4241
Consolidated Financial Statements – Unaudited (Item 1)			4342

Quarterly Financial Summary – Unaudited (Item 2)			9998
Quarterly Earnings Trend – Unaudited			~~101~~100

Part II. Other Information
Item 1. Legal Proceedings			~~102~~101

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			~~102~~101
Item 6. Exhibits			~~102~~101
Signatures			~~103~~102

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Performance Summary

BOK Financial Corporation (“the Company”) reported net income of $188.3 million or $2.74 per diluted share for the third quarter of 2021. Net income was $154.0 million or $2.19 per diluted share for the third quarter of 2020 and $166.4 million or $2.40 per diluted share for the second quarter of 2021. Net income was $64.7 million or $0.92 per diluted share for the second quarter of 2020 and $146.1 million or $2.10 per diluted share for the first quarter of 2021. Forecasts for improving macroeconomic factors, including stabilizing energy prices, and improvingContinued improvement in credit quality metrics and lower loan balances coupled with strength in commodity prices and a continued optimistic outlook for growth in gross domestic product and the labor markets resulted in a $23.0 million negative provision for expected credit losses in the third quarter of 2021. A $35.0 million ~~and $25.0 million~~negative provision for expected credit losses was recorded in the second quarter of 2021 and ~~first quarter of 2021, respectively. A~~no provision for expected credit losses ~~of $135.3 million~~ was recorded in the ~~second~~third quarter of 2020.

Pre-provision net revenue ("PPNR"), a non-GAAP measure, was ~~$179.9~~$219.4 million for the third quarter of 2021 compared to $204.6 million for the third quarter of 2020. A $31.1 million gain on sale of an alternative investment and reduced operating expenses during the third quarter of 2021 were partially offset by a $25.7 million decrease in mortgage banking revenue. PPNR improved $39.5 million over the second quarter of 2021 ~~compared to $215.8 million for the second quarter of 2020. The decrease in PPNR was~~largely due to lower combined net interest revenue and fees and commission revenue. This was largely driven by lower average loan balances due to customer deleveraging during the current economic uncertainty, narrowing net interest margin and compressed margins from our mortgage banking activities. PPNR improved $16.5 million over the first quarter of 2021. Growthgrowth in much of our fee-based business, led by brokerage and trading and ~~fiduciary and asset management revenues, was partially offset by lower~~ mortgage banking ~~revenue.~~revenues.

Highlights of the ~~second~~third quarter of 2021 included:

•Net interest revenue totaled ~~$280.3~~$280.2 million, an increase of ~~$2.2~~$8.5 million over the ~~second~~third quarter of 2020. Average earning assets were ~~$43.9~~$43.0 billion for the ~~second~~third quarter of 2021 compared to ~~$40.3~~$39.6 billion for the ~~second~~third quarter of 2020, largely driven by growth in trading securities. Net interest margin was ~~2.60~~2.66 percent for the ~~second~~third quarter of 2021 compared to ~~2.83~~2.81 percent for the ~~second~~third quarter of ~~2020. The Federal Reserve reduced~~2020, largely due to a shift in earning asset mix and investment of cash flows received from maturities in the ~~federal funds rate to near zero in March 2020. Other short-term~~available for sale securities portfolio at lower current market ~~interest rates followed, reducing the yield on floating-rate assets by more than the amount by which funding costs could be reduced, compressing the margin.~~rates. Net interest revenue was consistent with the ~~first~~second quarter of 2021. Net interest margin ~~decreased 2~~increased 6 basis points.

•Fees and commissions revenue totaled ~~$169.4~~$190.4 million, a decrease of ~~$44.3~~$32.4 million compared to the ~~second~~third quarter of 2020. Mortgage banking revenue decreased ~~$32.7~~$25.7 million due to a combination of lower mortgage production volume and margin compression. Brokerage and trading revenue decreased ~~$32.6~~$21.6 million, largely due to a shift from trading revenue to net interest revenue on trading securities. These decreases were partially offset by ~~higher~~growth in fiduciary and asset management revenue, operating revenue from repossessed oil and gas assets and ~~smaller increases in~~ deposit service ~~charges revenue, fiduciary and asset management fees, and transaction card revenue.~~charges. Fees and commissions revenue increased ~~$7.3~~$21.0 million compared to the ~~first~~second quarter of 2021, including ~~a $9.3~~an $11.1 million increase in trading revenue due to anhigher margin market opportunities and a $5.1 million increase in ~~higher margin residential mortgage trading volume.~~customer hedging revenue, primarily attributed to energy customers. Mortgage banking revenue also increased $5.1 million.

•Other operating expense totaled ~~$291.2~~$291.3 million, a decrease of ~~$4.8~~$5.8 million compared to the ~~second~~third quarter of 2020. Personnel expense decreased ~~$4.2~~$4.0 million, due to ~~decreases~~a reduction in ~~regular compensation expense,~~ incentive compensation expense. Non-personnel expense decreased $1.8 million compared to the third quarter of 2020 as lower mortgage banking costs and FDIC insurance expense were largely offset by increased data processing and communications expense and ~~deferred compensation costs. These decreases were partially offset by an increase in employee insurance costs. Non-personnel~~operating expenses on repossessed oil and gas properties. Operating expense was ~~relatively~~ consistent ~~compared to~~with the second quarter of ~~2020. Operating~~2021 as a $3.8 million increase in personnel expense ~~decreased $4.6~~was offset by a $3.7 million ~~compared~~decrease in non-personnel expense, primarily due to ~~the first quarter~~a reduction of ~~2021. The first quarter of 2021 included a $4.0 million charitable contribution~~expenses related to oil and gas properties sold during the ~~BOKF Foundation that did not recur in the second~~ quarter.

•Period-end outstanding loan balances totaled ~~$21.4~~$20.3 billion at ~~June~~September 30, 2021, a decrease of $1.1 billion compared to ~~March 31,~~June 30, 2021. Loans originated as part of the Small Business Administration's Paycheck Protection Program ("PPP") decreased ~~$727~~$586 million to $~~1.1 billion~~536 million. ~~Paydowns~~The remaining decrease was primarily attributed to paydowns of commercial energy loans and commercial real estate ~~loans were partially offset by an increase in healthcare and personal~~ loans. Average loan balances decreased ~~$590 million to $22.2~~$1.3 billion compared to the ~~previous quarter.~~prior quarter to $20.8 billion.

•The combined allowance for credit losses totaled $306 million or 1.54 percent of outstanding loans, excluding PPP loans, at September 30, 2021. The combined allowance for credit losses was $336 million or 1.66 percent of outstanding loans, excluding PPP loans, at June 30, ~~2021. The combined allowance for credit losses was $385 million or 1.86 percent of outstanding loans, excluding PPP loans, at March 31,~~ 2021.

- 1 -

•Nonperforming assets not guaranteed by U.S. government agencies decreased ~~$51~~$66 million compared to ~~March 31,~~June 30, 2021. Potential problem loans decreased ~~$38~~$51 million while other loans especially mentioned ~~decreased $134~~increased $4.6 million. Net charge-offs were $7.8 million or 0.16 percent of average loans on an annualized basis for the third quarter of 2021, excluding PPP loans. Net charge-offs were 0.26 percent of average loans, excluding PPP loans, over the last four quarters. Net charge-offs were $15.4 million or 0.30 percent of average loans on an annualized basis for the second quarter of 2021, excluding PPP loans. Net charge-offs were 0.32 percent of average loans, excluding PPP loans, over the last four quarters. Net charge-offs were $14.5 million or 0.28 percent of average loans on an annualized basis for the first quarter of 2021, excluding PPP loans.

•Period-end deposits were ~~$37.4~~$38.5 billion at ~~June~~September 30, 2021, a ~~$413 million decrease~~$1.1 billion increase compared to ~~March 31,~~June 30, 2021. Average deposits increased ~~$968~~$344 million, including ~~an $877~~a $481 million increase in demand deposits and a $137 million decrease in interest bearing deposits. Clients ~~across all of our business segments~~ continued to maintain higher deposit balances during this period of economic ~~uncertainty, supplemented by inflows from government stimulus.~~uncertainty.

•The common equity Tier 1 capital ratio at ~~June~~September 30, 2021 was ~~11.95~~12.26 percent. Other regulatory capital ratios were Tier 1 capital ratio, ~~12.01~~12.29 percent, total capital ratio, ~~13.61~~13.38 percent, and leverage ratio, ~~8.58~~8.77 percent. At ~~March 31,~~June 30, 2021, the common equity Tier 1 capital ratio was ~~12.14~~11.95 percent, the Tier 1 capital ratio was ~~12.21~~12.01 percent, total capital ratio was ~~13.98~~13.61 percent, and leverage ratio was ~~8.42~~8.58 percent.

•The Company repurchased ~~492,994~~478,141 shares of common stock at an average price of ~~$88.84~~$85.00 per share in the ~~second~~third quarter of 2021 and ~~260,000~~492,994 shares at an average price of ~~$77.20~~$88.84 in the ~~first~~second quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

•On ~~July~~August 23, 2021, the Company ~~notified holders that it will exercise~~exercised its option to redeem all $150 million of its 5.375 percent Subordinated Notes using existing capital. The repayment of the Notes resulted in a realized loss on ~~August 23, 2021. The Company will use existing capital for the redemption. The Notes carried an unamortized discount at June 30, 2021~~extinguishment of ~~$4.0 million which will be recognized at redemption.~~debt of $5.2 million. Redemption of the Notes will reduce annual interest expense by approximately $8.0 million.

•The Company paid a regular cash dividend of ~~$35.9~~$35.7 million or $0.52 per common share during the ~~second~~third quarter of 2021. On ~~August 3,~~November 2, 2021, the board of directors approved aan increase in the quarterly cash dividend ~~of $0.52~~to $0.53 per common share payable on or about ~~August 26,~~November 24, 2021 to shareholders of record as of ~~August 16,~~November 15, 2021.

- 2 -

Results of Operations

Net Interest Revenue and Net Interest Margin

Net interest revenue is the interest earned on debt securities, loans and other interest-earning assets less interest paid for interest-bearing deposits and other borrowings. The net interest margin is calculated by dividing tax-equivalent net interest revenue by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is typically greater than net interest spread due to interest income earned on assets funded by non-interest bearing liabilities such as demand deposits and equity.

Tax-equivalent net interest revenue totaled ~~$282.6~~$282.4 million for the ~~second~~third quarter of 2021 and ~~$280.7~~$274.2 million for the ~~second~~third quarter of 2020. Net interest revenue increased ~~$13.9~~$4.0 million from growth in average earning assets and ~~decreased $12.0~~$4.2 million ~~due to~~from changes in interest rates. ~~An increase in trading securities balances was partially offset by a decrease in loan balances.~~ Table 1 shows the effect on net interest revenue from changes in average balances and interest rates for various types of earning assets and interest-bearing liabilities.

Net interest margin was ~~2.60~~2.66 percent for the ~~second~~third quarter of 2021, compared to ~~2.83~~2.81 percent for the ~~second~~third quarter of 2020. In response to the anticipated impact to the economy from the COVID-19 pandemic, the Federal Reserve reduced the federal funds rate to near zero in March, 2020. Other short-term market interest rates followed, reducing the yield on floating-rate assets by more than the amount by which funding costs could be reduced, compressing the margin. The tax-equivalent yield on earning assets was ~~2.75~~2.78 percent, a decrease of 3726 basis ~~points compared to the second quarter of 2020.~~points. The available for sale securities portfolio yield decreased 4431 basis points to ~~1.85~~1.80 percent as principal cash flows received from maturities of the available for sale securities portfolio continue to be reinvested at lower current market rates. Loan yields ~~decreased 9~~increased 8 basis points to ~~3.54~~3.68 percent, largely due to ~~the decrease in short-term interest rates partially offset by the addition of PPP loan fees. PPP loan~~increased non-use fees ~~of $11.1 million were recognized in the second quarter of 2021.~~related to lower credit line utilization. As discussed in the Management's Discussion and Analysis - Loan section following, ~~$27.8~~$15.1 million of deferred PPP loans fees remain to be recognized in future ~~periods, including $3.8 million related to loans originated in 2020 that mature in 2022.~~periods. The yield on trading securities ~~decreased 51~~increased 12 basis points to ~~1.95~~2.04 percent. The yield on fair value option securities was up 70 basis points to 2.62 percent.

Funding costs decreased 1612 basis points compared to the ~~second~~third quarter of 2020. The cost of other borrowed funds decreased 21 basis ~~points~~point and the cost of interest-bearing deposits decreased 2013 basis points. The benefit to net interest margin from earning assets funded by non-interest bearing liabilities was 67 basis points for the ~~second~~third quarter of 2021, a decrease of 21 basis ~~points~~point compared to the ~~second~~third quarter of 2020.

Average earning assets for the ~~second~~third quarter of 2021 increased ~~$3.5~~$3.3 billion or 98 percent over the ~~second~~third quarter of 2020. This increase was largely due to growth in our trading of U.S. government issued mortgage-backed securities and the expansion of the available for sale securities portfolio, partially offset by a decrease in loans and fair value option securities. Average trading securities increased ~~$5.6~~$5.8 billion. The average balance of available for sale securities, which consists largely of residential and commercial mortgage-backed securities guaranteed by U.S. government agencies, increased ~~$763~~$865 million. We purchase securities to supplement earnings and to manage interest rate risk. Average loans, net of allowance for loan losses, decreased ~~$1.9~~$3.3 billion, largely due to purposeful deleveraging by our customers as borrowers continue to pay down during this time of economic ~~uncertainty.~~uncertainty combined with the reduction in PPP loans. Fair value option securities that we hold as an economic hedge against changes in the fair value of mortgage servicing rights decreased ~~$722~~$331 million.

Average deposits increased ~~$4.8~~$3.2 billion compared to the ~~second~~third quarter of 2020. Deposit growth is largely due to customers retaining elevated balances in the current economic environment, supplemented by the most recent government stimulus payments. Interest-bearing deposits increased ~~$3.1~~$1.5 billion while demand deposit balances increased $1.7 billion. Other borrowed funds decreased ~~$3.9~~$2.2 billion.

Tax-equivalent net interest revenue was ~~$282.6~~$282.4 million, largely unchanged compared to the ~~first~~second quarter of 2021. Net interest margin was ~~2.60~~2.66 percent compared to ~~2.62~~2.60 percent in the ~~first~~second quarter of 2021.

Average earning assets decreased ~~$354~~$892 million compared to the ~~first~~second quarter of 2021. Average loan balances decreased ~~$590 million,~~$1.3 billion, primarily from the payoff of PPP loans combined with energy and commercial real estate loan paydowns. Available for sale securities ~~decreased $190~~increased $203 million. Average trading securities grew by ~~$467~~$187 million. Other borrowed funds decreased ~~$824 million.~~$1.4 billion.

The yield on average earning assets was 2.78 percent, a 3 basis point increase from the prior quarter. The loan portfolio yield increased 14 basis points to 3.68 percent, largely due to non-use fees related to lower credit line utilization. The yield on the available for sale securities portfolio decreased 5 basis points to 1.80 percent.

- 3 -

Funding costs were 0.19 percent, down 2 basis points. The yield on average earning assets was 2.75 percent, a 3 basis point decrease from the prior quarter. The yield on the available for sale securities portfolio increased 1 basis point to 1.85 percent and the loan portfolio yieldcost of interest bearing deposits decreased 1 basis point to ~~3.54 percent.~~

~~Funding costs were 0.21 percent, down 3 basis points. The cost of interest-bearing deposits decreased 3 basis points to 0.14~~0.13 percent. The cost of other borrowed funds was down 2 basis points to ~~0.28~~0.30 percent. The cost of subordinated debentures decreased 24 basis points due to the redemption of $150 million in the third quarter. The benefit to net interest margin from assets funded by non-interest liabilities was 67 basis points for the ~~second~~third quarter of 2021, ~~a decrease~~an increase of 21 basis ~~points~~point compared to the prior quarter.

Our overall objective is to manage the Company’s balance sheet to be relatively neutral to changes in interest rates as is further described in the Market Risk section of this report. Approximately ~~75%~~74% 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 would be asset sensitive, which means that assets generally reprice more quickly than 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. government agencies and fund them with market-rate-sensitive liabilities. The liability-sensitive nature of this strategy provides an offset to the asset-sensitive characteristics of our loan portfolio. We also may use derivative instruments to manage our interest rate risk.

The effectiveness of these strategies is reflected in the overall change in net interest revenue due to changes in interest rates as shown in Table 1 and in the interest rate sensitivity projections as shown in the Market Risk section of this report.

Table 1 -- Volume/Rate Analysis

(In thousands)


		Three Months Ended June 30, 2021 / 2020						Six Months Ended June 30, 2021 / 2020							Three Months Ended Sept. 30, 2021 / 2020						Nine Months Ended Sept. 30, 2021 / 2020
				Change Due To1						Change Due To1							Change Due To1						Change Due To1
		Change		Volume		Yield/Rate		Change		Volume		Yield/Rate			Change		Volume		Yield/Rate		Change		Volume		Yield/Rate
Tax-equivalent interest revenue:	Tax-equivalent interest revenue:													Tax-equivalent interest revenue:
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	$	46	$	3	$	43	$	(2,173)	$	21	$	(2,194)	Interest-bearing cash and cash equivalents	$	78	$	45	$	33	$	(2,095)	$	151	$	(2,246)
Trading securities	Trading securities	25,229		31,144		(5,915)		49,343		63,648		(14,305)		Trading securities	30,240		28,907		1,333		79,583		92,699		(13,116)
Investment securities	Investment securities	(439)		(552)		113		(884)		(1,059)		175		Investment securities	(401)		(486)		85		(1,285)		(1,546)		261
Available for sale securities	Available for sale securities	(9,369)		4,414		(13,783)		(20,417)		12,519		(32,936)		Available for sale securities	(5,042)		4,763		(9,805)		(25,459)		17,156		(42,615)
Fair value option securities	Fair value option securities	(3,708)		(4,363)		655		(14,920)		(13,985)		(935)		Fair value option securities	(1,644)		(2,060)		416		(16,564)		(16,228)		(336)
Restricted equity securities	Restricted equity securities	(129)		(498)		369		(4,664)		(3,348)		(1,316)		Restricted equity securities	652		643		9		(4,012)		(2,110)		(1,902)
Residential mortgage loans held for sale	Residential mortgage loans held for sale	(571)		(452)		(119)		(314)		114		(428)		Residential mortgage loans held for sale	(311)		(335)		24		(625)		(229)		(396)
Loans	Loans	(21,860)		(16,970)		(4,890)		(67,884)		(11,034)		(56,850)		Loans	(25,008)		(29,734)		4,726		(92,892)		(41,589)		(51,303)
Total tax-equivalent interest revenue	Total tax-equivalent interest revenue	(10,801)		12,726		(23,527)		(61,913)		46,876		(108,789)		Total tax-equivalent interest revenue	(1,436)		1,743		(3,179)		(63,349)		48,304		(111,653)
Interest expense:	Interest expense:													Interest expense:
Transaction deposits	Transaction deposits	(3,782)		1,486		(5,268)		(33,316)		6,882		(40,198)		Transaction deposits	(3,197)		754		(3,951)		(36,513)		6,435		(42,948)
Savings deposits	Savings deposits	12		28		(16)		(28)		70		(98)		Savings deposits	8		24		(16)		(20)		85		(105)
Time deposits	Time deposits	(5,550)		(1,274)		(4,276)		(12,285)		(2,191)		(10,094)		Time deposits	(3,804)		(842)		(2,962)		(16,089)		(3,063)		(13,026)
Funds purchased and repurchase agreements	Funds purchased and repurchase agreements	(1,320)		(1,508)		188		(10,810)		(4,465)		(6,345)		Funds purchased and repurchase agreements	(477)		(629)		152		(11,287)		(5,029)		(6,258)
Other borrowings	Other borrowings	(1,870)		89		(1,959)		(25,543)		(6,366)		(19,177)		Other borrowings	(1,313)		(854)		(459)		(26,856)		(7,025)		(19,831)
Subordinated debentures	Subordinated debentures	(186)		7		(193)		(472)		(2)		(470)		Subordinated debentures	(890)		(733)		(157)		(1,362)		(776)		(586)
Total interest expense	Total interest expense	(12,696)		(1,172)		(11,524)		(82,454)		(6,072)		(76,382)		Total interest expense	(9,673)		(2,280)		(7,393)		(92,127)		(9,373)		(82,754)
Tax-equivalent net interest revenue	Tax-equivalent net interest revenue	1,895		13,898		(12,003)		20,541		52,948		(32,407)		Tax-equivalent net interest revenue	8,237		4,023		4,214		28,778		57,677		(28,899)
Change in tax-equivalent adjustment	Change in tax-equivalent adjustment	(310)						(724)						Change in tax-equivalent adjustment	(240)						(964)
Net interest revenue	Net interest revenue	$	2,205					$	21,265					Net interest revenue	$	8,477					$	29,742

1 Changes attributable to both volume and yield/rate are allocated to both volume and yield/rate on an equal basis.

- 4 -

Other Operating Revenue

Other operating revenue was ~~$191.4~~$229.8 million for the ~~second~~third quarter of 2021, ~~a decrease of $41.8 million compared to~~consistent with the ~~second~~third quarter of 2020. Mortgage production revenue was negatively impacted by a decline in mortgage production volumes and margin compression. Brokerage and trading revenue decreased, largely due to a shift offrom trading revenue to interest income from trading securities.

Other operating revenue increased ~~$14.4~~$38.4 million compared to the ~~first~~second quarter of 2021. ~~Brokerage~~Higher margin market opportunities and increased customer hedging combined to grow brokerage and trading revenue by $18.5 million. Other gains, net, which consist primarily of gains and losses on repossessed assets and alternative investments, increased ~~$8.6 million. An increase in agency residential mortgage trading volumes~~$14.6 million over the previous quarter. A gain on sale of an alternative investment was partially offset by subordinated debt extinguishment costs and ~~higher margin market opportunities combined to grow trading revenue.~~a loss on the sale of a repossessed oil and gas property.

Table 2 – Other Operating Revenue

(In thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Brokerage and trading revenue	Brokerage and trading revenue	$	29,408	$	62,022			$	(32,614)			(53)		%			$	20,782		$	8,626		42		%	Brokerage and trading revenue			$	47,930				$	69,526			$	(21,596)				(31)	%				$	29,408			$	18,522	63	%
Transaction card revenue	Transaction card revenue	24,923		22,940		1,983				9	%	22,430			2,493				11	%	Transaction card revenue		24,632				23,465						1,167				5		%			24,923					(291)				(1)		%
Fiduciary and asset management revenue	Fiduciary and asset management revenue	44,832		41,257		3,575				9	%	41,322			3,510				8	%	Fiduciary and asset management revenue		45,248				39,931				5,317					13	%			44,832					416					1	%
Deposit service charges and fees	Deposit service charges and fees	25,861		22,046		3,815				17	%	24,209			1,652				7	%	Deposit service charges and fees		27,429				24,286				3,143					13	%			25,861					1,568					6	%
Mortgage banking revenue	Mortgage banking revenue	21,219		53,936		(32,717)				(61)	%	37,113			(15,894)				(43)	%	Mortgage banking revenue		26,286				51,959				(25,673)					(49)	%			21,219					5,067					24	%
Other revenue	Other revenue	23,172		11,479		11,693				102	%	16,296			6,876				42	%	Other revenue		18,896				13,698				5,198					38	%			23,172					(4,276)					(18)	%
Total fees and commissions revenue	Total fees and commissions revenue	169,415		213,680		(44,265)				(21)	%	162,152			7,263				4	%	Total fees and commissions revenue		190,421				222,865				(32,444)					(15)	%			169,415					21,006					12	%

Other gains, net	Other gains, net	16,449		7,347		9,102				N/A		10,121			6,328				N/A		Other gains, net		31,091				2,044				29,047					N/A				16,449					14,642					N/A
Gain (loss) on derivatives, net	Gain (loss) on derivatives, net	18,820		21,885		(3,065)				N/A		(27,650)			46,470				N/A		Gain (loss) on derivatives, net		(5,760)				2,354				(8,114)					N/A				18,820					(24,580)					N/A
Loss on fair value option securities, net	Loss on fair value option securities, net	(1,627)		(14,459)		12,832				N/A		(1,910)			283				N/A		Loss on fair value option securities, net		(120)				(754)				634					N/A				(1,627)					1,507					N/A
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	(13,041)		(761)		(12,280)				N/A		33,874			(46,915)				N/A		Change in fair value of mortgage servicing rights		12,945				3,441				9,504					N/A				(13,041)					25,986					N/A
Gain on available for sale securities, net		1,430		5,580		(4,150)				N/A		467			963				N/A
Gain (loss) on available for sale securities, net																					Gain (loss) on available for sale securities, net		1,255				(12)				1,267					N/A				1,430					(175)					N/A

Total other operating revenue	Total other operating revenue	$	191,446	$	233,272	$	(41,826)			(18)	%	$	177,054		$	14,392			8	%	Total other operating revenue		$	229,832			$	229,938			$	(106)				—	%			$	191,446				$	38,386				20	%

Certain percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.

Fees and commissions revenue

Diversified sources of fees and commissions revenue are a significant part of our business strategy and represented 3840 percent of total revenue for the ~~second~~third quarter of 2021, excluding provision for credit losses and gains and losses on other assets, securities and derivatives and the change in the fair value of mortgage servicing rights. We believe that a variety of fee revenue sources provides an offset to changes in interest rates, values in the equity markets, commodity prices and consumer spending, all of which can be volatile. As an example of this strength, many of the economic factors such as rising interest rates resulting in growth in net interest revenue or fiduciary and asset management revenue may also decrease mortgage banking production volumes and related trading. We expect growth in other operating revenue to come through offering new products and services and by further development of our presence in other markets. However, current and future economic conditions, including the recent impact of the COVID-19 pandemic, regulatory constraints, increased competition and saturation in our existing markets could affect the rate of future increases.

Brokerage and Trading Revenue

Brokerage and trading revenue, which includes revenues from trading, customer hedging, retail brokerage and investment banking, decreased ~~$32.6~~$21.6 million or 5331 percent compared to the ~~second~~third quarter of 2020.

- 5 -

Trading revenue includes net realized and unrealized gains and losses primarily related to sales of residential mortgage-backed securities guaranteed by U.S. government agencies and related derivative instruments that enable our mortgage banking customers to manage their production risk. Trading revenue also includes net realized and unrealized gains and losses on municipal securities and other financial instruments that we sell to institutional customers, along with changes in the fair value of financial instruments we hold as economic hedges against market risk of our trading securities. Trading revenue was ~~$13.0~~$24.1 million for the ~~second~~third quarter of 2021, a ~~$30.9~~$22.8 million or 7049 percent decrease compared to the ~~second~~third quarter of 2020, primarily due to a shift from fee revenue to net interest revenue on trading securities. See additional discussion in "Lines of Business" section of Management's Discussion and Analysis.

Customer hedging revenue is based primarily on realized and unrealized changes in the fair value of derivative contracts held for customer risk management programs. As more fully discussed under Customer Derivative Programs in Note 3 of the Consolidated Financial Statements, we offer commodity, interest rate, foreign exchange and equity derivatives to our customers. Customer hedging revenue totaled ~~$1.8~~$6.9 million for the ~~second~~third quarter of 2021, a ~~$4.4~~$1.7 million or 7120 percent decrease compared to the ~~second~~third quarter of 2020, primarily attributed to energy customers. Customer hedging revenue includes credit valuation adjustments of the fair value of derivatives to reflect the risk of counterparty default.

Revenue earned from retail brokerage transactions totaled ~~$4.5~~$4.9 million for the ~~second~~third quarter of 2021, an increase of $1.1 million compared to the ~~second~~third quarter of 2020 due to increased trading activity.

Investment banking, which includes fees earned upon completion of underwriting, financial advisory services and loan syndication fees, totaled ~~$7.1~~$9.0 million for the ~~second~~third quarter of 2021, an increase of ~~$1.8~~$1.9 million or 3327 percent compared to the ~~second~~third quarter of 2020, related to the timing and volume of completed transactions.

Brokerage and trading revenue increased ~~$8.6~~$18.5 million compared to the previous ~~quarter, including a $9.3~~quarter. Higher margin market opportunities led to an $11.1 million increase in trading revenue. Customer hedging revenue increased $5.1 million, primarily attributed to energy customers. Investment banking revenue increased $1.9 million, largely due to the ~~combination~~timing of ~~an increase in agency residential mortgage trading volumes and higher margin market opportunities.~~financial advisory fees.

Transaction Card Revenue

Transaction card revenue ~~increased $2.0~~totaled $24.6 million for the third quarter of 2021, an increase of $1.2 million over the ~~second~~third quarter of 2020, ~~and $2.5 million over the previous quarter,~~ largely due to stimulus measures and the broader reopening of the U.S. ~~economy, as we saw both merchant and ATM transaction volume increase this~~economy. Transaction card revenue for the third quarter of 2021 was relatively consistent with the prior quarter.

Fiduciary and Asset Management Revenue

Fiduciary and asset management revenue is earned through managing or holding of assets for customers and executing transactions or providing related services. Approximately 90 percent of fiduciary and asset management revenue is primarily based on the fair value of assets. Rates applied to asset values vary based on the nature of the relationship. Fiduciary relationships and managed asset relationships generally have higher fee rates than non-fiduciary and/or managed relationships. Fiduciary and asset management revenue increased ~~$3.6~~$5.3 million or 913 percent compared to the ~~second~~third quarter of 2020. An increase in trust and managed account fees from higher client asset balances was partially offset by a decrease in mutual fund fees as the low rate environment has put pressure on our mutual fund revenue streams. We had approximately $2.9 million in fee waivers during the ~~second~~third quarter of 2021 compared to approximately ~~$1.1~~$1.7 million in the ~~second~~third quarter of 2020. We have voluntarily waived certain administration fees on the Cavanal Hill money market funds in order to maintain positive yields on these funds in the current short-term interest rate environment.

Fiduciary and asset management revenue ~~increased $3.5 million or 8 percent~~was up slightly compared to the ~~first~~second quarter of 2021 ~~due to~~as growth in trust and managed account fees from higher client asset balances more than offset the decrease from seasonal tax preparation fees ~~collected~~earned in the second ~~quarter and higher client asset balances.~~ quarter.

A distribution of assets under management or administration and related fiduciary and asset management revenue follows:

- 6 -

Table 3 -- Assets Under Management or Administration

(In thousands)


		Three Months Ended																			Three Months Ended
		June 30, 2021						June 30, 2020						March 31, 2021							September 30, 2021						September 30, 2020						June 30, 2021
		Balance		Revenue1		Margin2		Balance		Revenue1		Margin2		Balance		Revenue1		Margin2			Balance		Revenue1		Margin2		Balance		Revenue1		Margin2		Balance		Revenue1		Margin2
Managed fiduciary assets:	Managed fiduciary assets:																			Managed fiduciary assets:
Personal	Personal	$	11,973,758	$	28,634	0.96	%	$	9,786,686	$	24,131	0.99	%	$	11,369,467	$	23,608	0.83	%	Personal	$	12,259,320	$	28,176	0.92	%	$	10,238,728	$	23,008	0.90	%	$	11,973,758	$	28,634	0.96	%
Institutional	Institutional	16,339,627		7,257		0.18	%	13,565,799		6,129		0.18	%	15,144,797		6,818		0.18	%	Institutional	16,589,660		7,675		0.19	%	14,210,768		6,572		0.18	%	16,339,627		7,257		0.18	%
Total managed fiduciary assets	Total managed fiduciary assets	28,313,385		35,891		0.51	%	23,352,485		30,260		0.52	%	26,514,264		30,426		0.46	%	Total managed fiduciary assets	28,848,980		35,851		0.50	%	24,449,496		29,580		0.48	%	28,313,385		35,891		0.51	%

Non-managed assets:	Non-managed assets:																			Non-managed assets:
Fiduciary	Fiduciary	30,341,404		6,643		0.09	%	23,395,807		9,031		0.15	%	29,713,004		8,983		0.12	%	Fiduciary	31,648,595		6,070		0.08	%	24,438,017		9,904		0.16	%	30,341,404		6,643		0.09	%
Non-fiduciary	Non-fiduciary	19,480,250		2,298		0.05	%	16,643,422		1,966		0.05	%	18,421,279		1,913		0.04	%	Non-fiduciary	19,187,028		3,327		0.07	%	16,794,986		447		0.01	%	19,480,250		2,298		0.05	%
Safekeeping and brokerage assets under administration	Safekeeping and brokerage assets under administration	18,497,709		—		—	%	16,060,788		—		—	%	17,307,641		—		—	%	Safekeeping and brokerage assets under administration	19,158,186		—		—	%	16,737,433		—		—	%	18,497,709		—		—	%
Total non-managed assets	Total non-managed assets	68,319,363		8,941		0.05	%	56,100,017		10,997		0.08	%	65,441,924		10,896		0.07	%	Total non-managed assets	69,993,809		9,397		0.05	%	57,970,436		10,351		0.07	%	68,319,363		8,941		0.05	%

Total assets under management or administration	Total assets under management or administration	$	96,632,748	$	44,832	0.19	%	$	79,452,502	$	41,257	0.21	%	$	91,956,188	$	41,322	0.18	%	Total assets under management or administration	$	98,842,789	$	45,248	0.18	%	$	82,419,932	$	39,931	0.19	%	$	96,632,748	$	44,832	0.19	%

1 Fiduciary and asset management revenue includes asset-based and other fees associated with the assets.

2 Annualized revenue divided by period-end balance.

A summary of changes in assets under management or administration for the three months ended ~~June~~September 30, 2021 and 2020 follows:

Table 4 -- Changes in Assets Under Management or Administration

(In thousands)


		Three Months Ended June 30,				Three Months Ended September 30,
		2021		2020				2021		2020
Beginning balance	Beginning balance	$	91,956,188	$	75,783,829		Beginning balance	$	96,632,748	$	79,452,502
Net inflows (outflows)	Net inflows (outflows)	1,191,390		(1,219,567)			Net inflows (outflows)	1,551,832		287,132

Net change in fair value	Net change in fair value	3,485,170		4,888,240			Net change in fair value	658,209		2,680,298
Ending balance	Ending balance	$	96,632,748	$	79,452,502		Ending balance	$	98,842,789	$	82,419,932

Assets under management as of September 30, 2021 consist of 41 percent fixed income, 39 percent equities, 12 percent cash, and 8 percent alternative investments.

Deposit Service Charges and Fees

Deposit service charges and fees increased ~~$3.8~~$3.1 million compared to the ~~second~~third quarter of 2020 and ~~$1.7~~$1.6 million over the ~~first~~second quarter of 2021. ~~This increase was primarily due to commercial~~Commercial accounts where lower earnings credit rates caused by the low interest rate environment have resulted in higher service ~~charges.~~charges and consumer activity has increased following the pandemic shut downs.

- 7 -

Mortgage Banking Revenue

Mortgage banking revenue decreased ~~$32.7~~$25.7 million or 6149 percent compared to the ~~second~~third quarter of ~~2020 and $15.9 million or 43 percent compared to the first quarter of 2021.~~2020. Mortgage loan production volume decreased ~~$429~~$431 million or 4041 percent ~~compared to second quarter of 2020 and decreased $206 million or 24 percent compared to first quarter of 2021. The decline in mortgage production volume was~~ largely due to industry-wide housing inventory constraints ~~changes to government-sponsored entity delivery limits on second homes and investment properties,~~ and overall market conditions. ~~The realized margin on funded mortgage loans decreased 35 basis points to 2.75 percent compared to first quarter~~Production revenue as a percentage of ~~2021 while the gain on sale margin,~~production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, ~~decreased 143~~was 2.50 percent in the third quarter of 2021, 117 basis points lower than the third quarter of 2020.

Mortgage banking revenue increased $5.1 million or 24 percent over the second quarter of 2021. While mortgage production volume decreased $28 million to ~~1.55 percent. Margins were compressed largely due to competitive pricing pressure and timing~~$615 million, production revenue as a percentage of ~~settlements.~~production volume increased 95 basis points.

Table 5 – Mortgage Banking Revenue

(In thousands)


		Three Months Ended June 30, 2021						Increase (Decrease)					% Increase (Decrease)		Three Months Ended Mar. 31, 2021					Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)				% Increase (Decrease)				Three Months Ended June 30, 2021				Increase (Decrease)				% Increase (Decrease)
		2021			2020													2021									2020
Mortgage production revenue	Mortgage production revenue	$	10,004		$	39,185					$	(29,181)					(74)		%			$	25,287		$	(15,283)		(60)		%	Mortgage production revenue			$	15,403			$	38,431			$	(23,028)			(60)	%			$	10,004			$	5,399	54	%

Mortgage loans funded for sale	Mortgage loans funded for sale	$	754,893		$	1,184,249									$	843,053										Mortgage loans funded for sale		$	652,336			$	1,032,472											$	754,893
Add: Current period end outstanding commitments	Add: Current period end outstanding commitments	276,154			546,304										387,465											Add: Current period end outstanding commitments		239,066				560,493												276,154
Less: Prior period end outstanding commitments	Less: Prior period end outstanding commitments	387,465			657,570										380,637											Less: Prior period end outstanding commitments		276,154				546,304												387,465
Total mortgage production volume	Total mortgage production volume	$	643,582		$	1,072,983		$	(429,401)				(40)	%	$	849,881				$	(206,299)			(24)	%	Total mortgage production volume		$	615,248			$	1,046,661				$	(431,413)			(41)		%		$	643,582			$	(28,334)			(4)		%

Mortgage loan refinances to mortgage loans funded for sale	Mortgage loan refinances to mortgage loans funded for sale	48		%	71		%	(2,300)		bps					65		%			(1,700)		bps				Mortgage loan refinances to mortgage loans funded for sale		48		%		54		%		(600)		bps						48		%		—		bps
Realized margin on funded mortgage loans	Realized margin on funded mortgage loans	2.75		%	2.04		%	71		bps					3.10		%			(35)		bps				Realized margin on funded mortgage loans		2.48		%		3.52		%		(104)		bps						2.75		%		(27)		bps
Gain on sale margin		1.55		%	3.65		%	(210)		bps					2.98		%			(143)		bps
Production revenue as a percentage of production volume																										Production revenue as a percentage of production volume		2.50		%		3.67		%		(117)		bps						1.55		%		95		bps
Primary mortgage interest rates:	Primary mortgage interest rates:																									Primary mortgage interest rates:
Average	Average	3.00		%	3.24		%	(24)		bps					2.88		%			12		bps				Average		2.87		%		2.95		%		(8)		bps						3.00		%		(13)		bps
Period end	Period end	3.02		%	3.13		%	(11)		bps					3.17		%			(15)		bps				Period end		3.01		%		2.90		%		11		bps						3.02		%		(1)		bps

Mortgage servicing revenue	Mortgage servicing revenue	$	11,215		$	14,751		$	(3,536)				(24)	%	$	11,826				$	(611)			(5)	%	Mortgage servicing revenue		$	10,883			$	13,528			$	(2,645)			(20)		%		$	11,215			$	(332)			(3)		%
Average outstanding principal balance of mortgage loans serviced for others	Average outstanding principal balance of mortgage loans serviced for others	15,065,173			19,319,872			(4,254,699)					(22)	%	15,723,231					(658,058)				(4)	%	Average outstanding principal balance of mortgage loans serviced for others		14,899,306				17,434,215				(2,534,909)				(15)		%		15,065,173				(165,867)				(1)		%

Average mortgage servicing revenue rates	Average mortgage servicing revenue rates	0.30		%	0.31		%	(1)		bp					0.31		%			(1)		bp				Average mortgage servicing revenue rates		0.29		%		0.31		%		(2)		bp						0.30		%		(1)		bp

Primary rates disclosed in Table 5 above represent rates generally available to borrowers on 30 year conforming mortgage loans.

Other Revenue

Other revenue increased ~~$11.7~~$5.2 million over the ~~second~~third quarter of 2020, ~~and $6.9 million compared to the first quarter of 2021. The increase was~~ primarily due to higher production revenue from repossessed oil and gas properties; however, this iswas partially offset by increased operating expenses on these properties. ~~Revenue and expense from~~Other revenue decreased $4.3 million compared to the second quarter of 2021 due to the sale of a repossessed oil and gas ~~properties will decrease as the properties are sold.~~property which resulted in lower operating revenue and expenses.

- 8 -

Net gains on other assets, securities and derivatives

Other gains, net ~~gains totaled $16.4~~increased $29.0 million incompared to the third quarter of 2020 and $14.6 million over the second quarter of ~~2021 compared to $7.3 million in the second quarter of 2020.~~2021. The fluctuation is related to increased gains on alternative investments and sales of repossessed assets. Other net gains totaled $10.1 million in the first quarter of 2021. Increases in gains on alternative investments and the sale of ~~fixed assets were~~an alternative investment resulted in a $31.1 million gain, net of non-controlling interest, which was partially offset by a ~~decrease in gains~~$5.2 million loss on ~~sales~~the extinguishment of subordinated debentures and a $3.9 million loss on the sale of a repossessed oil and gas asset. The prior quarter included net gain on oil and gas repossessed assets.

~~- 8 -~~

As discussed in the Market Risk section following, the fair value of our mortgage servicing rights ("MSRs") changes in response to changes in primary mortgage loan rates and other assumptions. We attempt to mitigate the earnings volatility caused by changes in the fair value of MSRs by designating certain financial instruments as an economic hedge. Changes in the fair value of these instruments are generally expected to partially offset changes in the fair value of MSRs.

Historically low mortgage rates in 2020 and early 2021 resulted in a favorable risk profile for our MSRs that supported hedge performance during that time period. Increases in longer-term interest rates during 2021 has returned the risk profile of our MSRs to a more balanced profile, as can be seen in Table 25 of the Market Risk section.

Table 6 - Gain (Loss) on Mortgage Servicing Rights

(In thousands)


		Three Months Ended							Three Months Ended
		June 30, 2021		Mar. 31, 2021		June 30, 2020			Sept. 30, 2021		June 30, 2021		Sept. 30, 2020
Gain (loss) on mortgage hedge derivative contracts, net	Gain (loss) on mortgage hedge derivative contracts, net	$	18,764	$	(27,705)	$	21,815	Gain (loss) on mortgage hedge derivative contracts, net	$	(5,829)	$	18,764	$	2,295
Loss on fair value option securities, net	Loss on fair value option securities, net	(1,627)		(1,910)		(14,459)		Loss on fair value option securities, net	(120)		(1,627)		(754)
Gain (loss) on economic hedge of mortgage servicing rights, net	Gain (loss) on economic hedge of mortgage servicing rights, net	17,137		(29,615)		7,356		Gain (loss) on economic hedge of mortgage servicing rights, net	(5,949)		17,137		1,541
Gain (loss) on change in fair value of mortgage servicing rights	Gain (loss) on change in fair value of mortgage servicing rights	(13,041)		33,874		(761)		Gain (loss) on change in fair value of mortgage servicing rights	12,945		(13,041)		3,441
Gain on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	Gain on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	4,096		4,259		6,595		Gain on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	6,996		4,096		4,982
Net interest revenue on fair value option securities1	Net interest revenue on fair value option securities1	341		393		2,702		Net interest revenue on fair value option securities1	286		341		1,565
Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges	Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges	$	4,437	$	4,652	$	9,297	Total economic benefit of changes in the fair value of mortgage servicing rights, net of economic hedges	$	7,282	$	4,437	$	6,547

1 Actual interest earned on fair value option securities less internal transfer-priced cost of funds.

- 9 -

Other Operating Expense

Other operating expense for the ~~second~~third quarter of 2021 totaled ~~$291.2~~$291.3 million, a decrease of ~~$4.8~~$5.8 million compared to the ~~second~~third quarter of 2020 and ~~a decrease of $4.6 million compared to~~consistent with the ~~first~~second quarter of 2021.

Table 7 – Other Operating Expense

(In thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Regular compensation	Regular compensation	$	96,081	$	99,267			$	(3,186)			(3)		%			$	97,211		$	(1,130)		(1)		%	Regular compensation			$	95,808				$	96,703			$	(895)				(1)	%				$	96,081			$	(273)	—	%
Incentive compensation:	Incentive compensation:																				Incentive compensation:
Cash-based	Cash-based	45,668		46,569		(901)				(2)	%	42,259			3,409				8	%	Cash-based		54,437				49,484						4,953				10		%			45,668					8,769				19		%
Share-based	Share-based	251		3,455		(3,204)				(93)	%	4,570			(4,319)				95	%	Share-based		1,272				9,596				(8,324)					(87)	%			251					1,021					(407)	%
Deferred compensation	Deferred compensation	3,906		5,932		(2,026)				N/A		2,263			1,643				N/A		Deferred compensation		1,549				2,450				(901)					N/A				3,906					(2,357)					N/A
Total incentive compensation	Total incentive compensation	49,825		55,956		(6,131)				(11)	%	49,092			733				1	%	Total incentive compensation		57,258				61,530				(4,272)					(7)	%			49,825					7,433					15	%
Employee benefits	Employee benefits	26,129		21,012		5,117				24	%	26,707			(578)				(2)	%	Employee benefits		22,797				21,627				1,170					5	%			26,129					(3,332)					(13)	%
Total personnel expense	Total personnel expense	172,035		176,235		(4,200)				(2)	%	173,010			(975)				(1)	%	Total personnel expense		175,863				179,860				(3,997)					(2)	%			172,035					3,828					2	%
Business promotion	Business promotion	2,744		1,935		809				42	%	2,154			590				27	%	Business promotion		4,939				2,633				2,306					88	%			2,744					2,195					80	%
Charitable contributions to BOKF Foundation		—		3,000		(3,000)				N/A		4,000			(4,000)				N/A

Professional fees and services	Professional fees and services	12,361		12,161		200				2	%	11,980			381				3	%	Professional fees and services		12,436				14,074				(1,638)					(12)	%			12,361					75					1	%
Net occupancy and equipment	Net occupancy and equipment	26,633		30,675		(4,042)				(13)	%	26,662			(29)				—	%	Net occupancy and equipment		28,395				28,111				284					1	%			26,633					1,762					7	%
Insurance	Insurance	3,660		5,156		(1,496)				(29)	%	4,620			(960)				(21)	%	Insurance		3,712				5,848				(2,136)					(37)	%			3,660					52					1	%
Data processing and communications	Data processing and communications	36,418		32,942		3,476				11	%	37,467			(1,049)				(3)	%	Data processing and communications		38,371				34,751				3,620					10	%			36,418					1,953					5	%
Printing, postage and supplies	Printing, postage and supplies	4,285		3,502		783				22	%	3,440			845				25	%	Printing, postage and supplies		3,558				3,482				76					2	%			4,285					(727)					(17)	%
Amortization of intangible assets	Amortization of intangible assets	4,578		5,190		(612)				(12)	%	4,807			(229)				(5)	%	Amortization of intangible assets		4,488				5,071				(583)					(12)	%			4,578					(90)					(2)	%
Mortgage banking costs	Mortgage banking costs	11,126		15,598		(4,472)				(29)	%	13,943			(2,817)				(20)	%	Mortgage banking costs		8,962				15,803				(6,841)					(43)	%			11,126					(2,164)					(19)	%
Other expense	Other expense	17,312		9,572		7,740				81	%	13,701			3,611				26	%	Other expense		10,553				7,411				3,142					42	%			17,312					(6,759)					(39)	%
Total other operating expense	Total other operating expense	$	291,152	$	295,966	$	(4,814)			(2)	%	$	295,784		$	(4,632)			(2)	%	Total other operating expense		$	291,277			$	297,044			$	(5,767)				(2)	%			$	291,152				$	125				—	%

Average number of employees (full-time equivalent)	Average number of employees (full-time equivalent)	4,817		5,037		(220)				(4)	%	4,902			(85)				(2)	%	Average number of employees (full-time equivalent)		4,794				4,926				(132)					(3)	%			4,817					(23)					—	%

Certain percentage increases (decreases) are not meaningful for comparison purposes.

Personnel expense

Personnel expense decreased ~~$4.2~~$4.0 million compared to the ~~second~~third quarter of 2020. Incentive compensation decreased ~~$6.1~~$4.3 million. Share-based compensation expense decreased ~~$3.2~~$8.3 million based on changes in assumptions of certain performance-based equity awards. This was partially offset by a $5.0 million increase in cash based incentive compensation expense related to strong revenue growth. Employee benefits increased $1.2 million primarily due to increased healthcare costs.

Personnel expense increased $3.8 million over the second quarter of 2021. Cash based incentive compensation expense increased $8.8 million, primarily in relation to increased trading revenue. Deferred compensation expense, ~~decreased $2.0 million; however, this~~which is largely offset by a decrease in the value of related investments included in Other gains (losses), ~~net. Regular compensation~~net, decreased $2.4 million. Employee benefits expense decreased ~~$3.2~~$3.3 million as we have managed personnel costs by challenging the need to fill open positions and add new positions. These decreases were partially offset by an increase of $5.1 million in employee benefits expense due to ~~increased healthcare costs as healthcare spending returned to normal levels following the earlier months of the pandemic.~~

~~Personnel expense decreased $1.0 million compared to the first quarter of 2021, primarily due to a decrease of $1.1 million in regular compensation expense. A $3.0 million seasonal decrease in~~reduced payroll ~~tax expense was almost fully offset by a $2.8 million increase in~~taxes and employee healthcare ~~costs, which reflects more normal pre-pandemic healthcare levels.~~costs.

- 10 -

Non-personnel operating expense

Non-personnel operating expense ~~was relatively consistent with~~decreased $1.8 million compared to the ~~second~~third quarter of 2020. Mortgage banking costs decreased ~~$4.5~~$6.8 million, ~~substantially~~ due to a decrease in accruals related to default servicing and loss mitigation costs on loans serviced for ~~others. Occupancy and equipment expenses~~others combined with a decrease in prepayments. Expense associated with FDIC insurance decreased ~~$4.0~~$2.1 million as the second quarter of 2020 included impairment of two leases where assumptions regarding subleasing changed due to deteriorating economic conditions. Also, a $3.0 million charitable contribution was made to the BOKF Foundation in the second quarter of 2020.Company's risk profile and liquidity improved. Professional fees and services expense decreased $1.6 million. These expense decreases were ~~almost entirely~~ offset by ~~an increase of $7.7 million in other expense, largely due to increased operating expenses on repossessed oil and gas properties, and~~ a ~~$3.5~~$3.6 million increase in data processing and communications expense, primarily due to continued investment in technology ~~upgrades.~~upgrades, an increase of $3.1 million in other expense, largely due to operating expenses on repossessed oil and gas properties, and a $2.3 million increase in business promotion expense.

Non-personnel expense decreased $3.7 million compared to the ~~first~~second quarter of 2021. The first quarter of 2021 included a $4.0 million charitable donation to the BOKF Foundation. Mortgage banking costs decreased $2.8 million due to a decrease in prepayments combined with lower accruals related to default servicing and loss mitigation costs on loans serviced for others. Data processing and communicationsOther expense decreased ~~$1.0~~$6.8 million as a result of ~~a reduction of system conversion expenses.~~lower operating expenses on repossessed assets. Mortgage banking costs decreased $2.2 million due to slower repayments. These decreases were partially offset by ana $2.2 million increase ~~of $3.6~~in business promotion costs, a $2.0 million increase in ~~other~~data processing and communications expense ~~primarily due to increased operating expenses on repossessed assets.~~and a $1.8 million increase in occupancy and equipment expense.

Income Taxes

The effective tax rate was 22.4 percent for the third quarter of 2021, 24.7 percent for the third quarter of 2020 and 22.5 percent for the second quarter of ~~2021, 19.7 percent for the second quarter of 2020 and 22.7 percent for the first quarter of~~ 2021. The effective ~~tax~~ rate for the ~~second~~third quarter of 2020 was ~~lower~~higher compared ~~the second~~to third quarter of 2021, primarily due to ~~lower~~an increase in forecasted pre-tax income for ~~2020. The lower forecasted pre-tax income for~~third quarter of 2020 ~~was primarily due to~~and the ~~larger provision for credit losses.~~completion of 2019 tax returns. Income tax expense for the ~~second~~third quarter of 2021 increased $~~6.1~~5.6 million compared to the ~~first~~second quarter of 2021, primarily due to the increase in net income before tax for the ~~second~~third quarter of ~~2021.~~2021.

Lines of Business

We operate three principal lines of business: Commercial Banking, Consumer Banking and Wealth Management. Commercial Banking includes lending, treasury and cash management services and customer risk management products for small businesses, middle market and larger commercial customers. Commercial Banking also includes the TransFund EFT network. Consumer Banking includes retail lending and deposit services, lending and deposit services to small business customers served through our consumer branch network and all mortgage banking activities. Wealth Management provides fiduciary services, private banking services, insurance and investment advisory services in all markets.��Wealth Management also underwrites state and municipal securities and engages in brokerage and trading activities.

In addition to our lines of business, we have a Funds Management unit. The primary purpose of this unit is to manage our overall liquidity needs and interest rate risk. Each line of business borrows funds from and provides funds to the Funds Management unit as needed to support their operations. Operating results for Funds Management and other include the effect of interest rate risk positions and risk management activities, securities gains and losses including impairment charges, the provision for credit losses in excess of net loans charged off, tax planning strategies and certain executive compensation costs that are not attributed to the lines of business.

We allocate resources and evaluate the performance of our lines of business using the net direct contribution, which includes the allocation of funds, actual net credit losses and capital costs. In addition, we measure the performance of our business lines after allocation of certain indirect expenses and taxes based on statutory rates.

The cost of funds borrowed from the Funds Management unit by the operating lines of business is updated annually at the beginning of the year and transfer priced at rates that approximate market rates for funds with similar repricing and cash flow characteristics. Market rates are generally based on the applicable LIBOR or interest rate swap rates, adjusted for prepayment and liquidity risk. This method of transfer-pricing funds that supports assets of the operating lines of business tends to insulate them from interest rate risk.

~~- 11 -~~

The value of funds provided by the operating lines of business to the Funds Management unit is updated annually at the beginning of the year and is based on rates that approximate wholesale market rates for funds with similar repricing and cash flow characteristics. Market rates are generally based on LIBOR or interest rate swap rates. The funds credit formula applied to deposit products with indeterminate maturities is established based on their repricing characteristics reflected in a combination of the short-term LIBOR rate and a moving average of an intermediate-term swap rate, with an appropriate spread applied to both. Shorter duration products are weighted towards the short-term LIBOR rate and longer duration products are weighted towards the intermediate-term swap rates. The expected duration ranges from 30 days for certain rate-sensitive deposits to five years.

- 11 -

Economic capital is assigned to the business units by a capital allocation model that reflects management’s assessment of risk. This model assigns capital based upon credit, operating, interest rate and other market risk inherent in our business lines and recognizes the diversification benefits among the units. The level of assigned economic capital is a combination of the risk taken by each business line, based on its actual exposures and calibrated to its own loss history where possible. Average invested capital includes economic capital and amounts we have invested in the lines of business.

As shown in Table 8, net income attributable to our lines of business ~~decreased $41.5~~increased $23.4 million compared to the ~~second~~third quarter of 2020. Net interest revenue ~~decreased~~increased by ~~$3.1~~$10.5 million compared to the prior year, primarily driven by ~~lower average outstanding loan balances.~~the shift from fee revenue to net interest revenue on trading securities. Net charge-offs ~~increased $2.4~~decreased $19.0 million compared to the ~~second~~third quarter of 2020. Other operating revenue ~~decreased~~increased by ~~$39.6~~$3.8 million. An increase in other gains (losses), net, primarily from the $31.1 million ~~due to~~gain recognized on the sale of an alternative investment, positively impacted other operating revenue. This was partially offset by a ~~combination of inventory constraints and compressed margins that negatively impacted~~$25.6 million decrease in mortgage banking ~~revenue and a shift from trading revenue from our agency residential mortgage trading activities to net interest~~ revenue. Operating expense ~~increased $1.5~~decreased $3.7 million compared to the ~~second~~third quarter of 2020, ~~primarily~~mainly from reduced mortgage banking costs in ~~Commercial~~Consumer Banking.

Net interest revenue increased ~~$8.8~~$8.4 million compared to the ~~first~~second quarter of 2021, primarily due to ~~higher earnings~~favorable costs on funds borrowed from ~~deposits sold to~~ the Funds Management unit. Other operating revenue increased ~~$17.1~~$52.7 million. Growth in our fee-based business, led by brokerage and trading and ~~fiduciary and asset management revenues, were partially offset by lower~~ mortgage banking ~~revenue. Higher operating revenue from repossessed oil and gas assets also contributed to~~revenues, was supplemented by the ~~increase. Other operating expense increased $2.1 million.~~

gain on sale of a merchant banking alternative investment in the third quarter of 2021. Net income attributable to our Funds Management unit was positively impacted by lower interest rates on the ~~negative provision for credit losses in~~transfer pricing of funds provided by the ~~second quarter of 2021, compared to a provision for credit losses in excess of charge-offs in the second quarter of 2020.~~operating segments.

Table 8 -- Net Income by Line of Business

(In thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Commercial Banking	Commercial Banking	$	72,632	$	80,992			$	(8,360)			(10)		%			$	69,673		$	2,959		4		%	Commercial Banking			$	102,694				$	75,097			$	27,597				37	%				$	72,632			$	30,062	41	%
Consumer Banking	Consumer Banking	1,698		32,501		(30,803)				(95)	%	6,948			(5,250)				(76)	%	Consumer Banking		12,432				26,855						(14,423)				(54)		%			1,698					10,734				632		%
Wealth Management	Wealth Management	31,061		33,394		(2,333)				(7)	%	19,382			11,679				60	%	Wealth Management		41,406				31,212				10,194					33	%			31,061					10,345					33	%
Subtotal	Subtotal	105,391		146,887		(41,496)				(28)	%	96,003			9,388				10	%	Subtotal		156,532				133,164				23,368					18	%			105,391					51,141					49	%
Funds Management and other	Funds Management and other	61,030		(82,194)		143,224				N/A		50,057			10,973				N/A		Funds Management and other		31,790				20,870				10,920					N/A				61,030					(29,240)					N/A
Total	Total	$	166,421	$	64,693	$	101,728			157	%	$	146,060		$	20,361			14	%	Total		$	188,322			$	154,034			$	34,288				22	%			$	166,421				$	21,901				13	%

Certain percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.

- 12 -

Commercial Banking

Commercial Banking contributed ~~$72.6~~$102.7 million to consolidated net income in the ~~second~~third quarter of 2021, ~~a decrease~~an increase of ~~$8.4~~$27.6 million or 1037 percent compared to the ~~second~~third quarter of 2020. Other gains, net, increased $34.1 million, primarily from the gain recognized on the sale of a merchant banking alternative investment in the third quarter of 2021.

Table 9 -- Commercial Banking

(Dollars in thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Net interest revenue from external sources	Net interest revenue from external sources	$	151,942	$	174,314			$	(22,372)			(13)		%			$	155,799		$	(3,857)		(2)		%	Net interest revenue from external sources			$	150,211				$	173,248			$	(23,037)				(13)	%				$	151,942			$	(1,731)	(1)	%
Net interest expense from internal sources	Net interest expense from internal sources	(21,041)		(29,205)		8,164				(28)	%	(25,794)			4,753				(18)	%	Net interest expense from internal sources		(16,107)				(23,302)						7,195				(31)		%			(21,041)					4,934				(23)		%
Total net interest revenue	Total net interest revenue	130,901		145,109		(14,208)				(10)	%	130,005			896				1	%	Total net interest revenue		134,104				149,946				(15,842)					(11)	%			130,901					3,203					2	%
Net loans charged off	Net loans charged off	16,268		13,762		2,506				18	%	13,985			2,283				16	%	Net loans charged off		2,807				22,599				(19,792)					(88)	%			16,268					(13,461)					(83)	%
Net interest revenue after net loans charged off	Net interest revenue after net loans charged off	114,633		131,347		(16,714)				(13)	%	116,020			(1,387)				(1)	%	Net interest revenue after net loans charged off		131,297				127,347				3,950					3	%			114,633					16,664					15	%

Fees and commissions revenue	Fees and commissions revenue	63,368		46,515		16,853				36	%	49,847			13,521				27	%	Fees and commissions revenue		56,452				50,085				6,367					13	%			63,368					(6,916)					(11)	%
Other gains (losses), net		1,901		1,383		518				N/A		(3,268)			5,169				N/A
Other gains, net																					Other gains, net		36,059				1,936				34,123					N/A				1,901					34,158					N/A
Other operating revenue	Other operating revenue	65,269		47,898		17,371				36	%	46,579			18,690				40	%	Other operating revenue		92,511				52,021				40,490					78	%			65,269					27,242					42	%

Personnel expense	Personnel expense	39,848		39,873		(25)				—	%	39,252			596				2	%	Personnel expense		41,942				40,963				979					2	%			39,848					2,094					5	%
Non-personnel expense	Non-personnel expense	31,503		23,060		8,443				37	%	27,727			3,776				14	%	Non-personnel expense		26,359				25,883				476					2	%			31,503					(5,144)					(16)	%
Other operating expense	Other operating expense	71,351		62,933		8,418				13	%	66,979			4,372				7	%	Other operating expense		68,301				66,846				1,455					2	%			71,351					(3,050)					(4)	%

Net direct contribution	Net direct contribution	108,551		116,312		(7,761)				(7)	%	95,620			12,931				14	%	Net direct contribution		155,507				112,522				42,985					38	%			108,551					46,956					43	%
Gain on financial instruments, net	Gain on financial instruments, net	34		48		(14)				N/A		33			1				N/A		Gain on financial instruments, net		44				38				6					N/A				34					10					N/A
Gain on repossessed assets, net		3,565		191		3,374				N/A		12,737			(9,172)				N/A
Gain (loss) on repossessed assets, net																					Gain (loss) on repossessed assets, net		(3,945)				(4,332)				387					N/A				3,565					(7,510)					N/A
Corporate expense allocations	Corporate expense allocations	12,512		5,437		7,075				130	%	12,734			(222)				(2)	%	Corporate expense allocations		11,769				5,172				6,597					128	%			12,512					(743)					(6)	%
Income before taxes	Income before taxes	99,638		111,114		(11,476)				(10)	%	95,656			3,982				4	%	Income before taxes		139,837				103,056				36,781					36	%			99,638					40,199					40	%
Federal and state income tax	Federal and state income tax	27,006		30,122		(3,116)				(10)	%	25,983			1,023				4	%	Federal and state income tax		37,143				27,959				9,184					33	%			27,006					10,137					38	%
Net income	Net income	$	72,632	$	80,992	$	(8,360)			(10)	%	$	69,673		$	2,959			4	%	Net income		$	102,694			$	75,097			$	27,597				37	%			$	72,632				$	30,062				41	%

Average assets	Average assets	$	28,160,594	$	27,575,652	$	584,942			2	%	$	28,047,052		$	113,542			—	%	Average assets		$	28,474,182			$	28,000,183			$	473,999				2	%			$	28,160,594				$	313,588				1	%
Average loans	Average loans	16,981,888		19,262,827		(2,280,939)				(12)	%	17,522,520			(540,632)				(3)	%	Average loans		16,588,875				18,677,401				(2,088,526)					(11)	%			16,981,888					(393,013)					(2)	%
Average deposits	Average deposits	17,049,772		14,599,225		2,450,547				17	%	16,130,168			919,604				6	%	Average deposits		17,881,673				15,375,450				2,506,223					16	%			17,049,772					831,901					5	%
Average invested capital	Average invested capital	2,094,022		2,230,707		(136,685)				(6)	%	2,157,062			(63,040)				(3)	%	Average invested capital		2,091,844				2,230,707				(138,863)					(6)	%			2,156,566					(64,722)					(3)	%

Certain percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.

Net interest revenue decreased ~~$14.2~~$15.8 million compared to the ~~second~~third quarter of 2020, primarily due to reduced loan ~~balances coupled with a reduction in the spread on deposits sold to our Funds Management unit. This was partially offset by increased deposit~~ balances. Growth in average deposits and decreases in average loans caused Commercial Banking to be a net provider of funds to Funds Management in the second quarter of 2021 compared to a net user of funds in the second quarter of 2020 and the first quarter of 2021. Net loans charged-off ~~increased $2.5~~decreased $19.8 million.

Fees and commissions revenue increased ~~$16.9~~$6.4 million or 3613 percent while operating expenses increased ~~$8.4~~$1.5 million or 132 percent. An increase in production revenue from repossessed oil and gas properties of $2.8 million was partially offset by an increase in related operating expenses. Deposit service charges and fees ~~syndication fees,~~ and transaction card revenues were also up over the ~~second~~third quarter of 2020.

~~- 13 -~~

~~During the second quarter of 2021, a gain of $7.3 million was realized on the sale of repossessed assets, which was partially offset by impairment taken on a certain repossessed oil and gas property.~~ Corporate expense allocations increased ~~$7.1~~$6.6 million or ~~130~~128 percent compared to the prior year. The Commercial team provided resources to originate and service the PPP loan activity outside of the Commercial Banking segment throughout 2020, which lowered allocations to Commercial Banking in the prior year.

The average outstanding balance of loans attributed to Commercial Banking decreased ~~$2.3~~$2.1 billion or 1211 percent ~~to $17.0 billion~~ compared to the ~~second~~third quarter of ~~2020.~~2020 to $16.6 billion. See the Loans section of Management’s Discussion and Analysis of Financial Condition following for additional discussion of changes in commercial and commercial real estate loans, which are primarily attributed to the Commercial Banking segment.

- 13 -

Average deposits attributed to Commercial Banking were ~~$17.0~~$17.9 billion for the ~~second~~third quarter of 2021, a $2.5 billion or 1716 percent increase over the ~~second~~third quarter of 2020. Continued deposit growth is primarily due to higher balance retention by customers in the current economic environment. See Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital for further discussion of change.

Net interest revenue ~~was relatively consistent with first~~increased $3.2 million over the second quarter of ~~2021.~~2021, primarily due to favorable yields on deposits sold to our Funds Management unit. Fees and commissions revenue ~~increased $13.5~~decreased $6.9 million ~~over the first quarter of 2021. Operating~~and operating expense ~~increased $4.4~~decreased $3.1 million or 74 percent compared to the ~~first~~second quarter of 2021. ~~Both increases were primarily due to the operation of~~A decrease in operating revenue from repossessed oil and gas ~~properties. Net gain~~assets due to the sale of a property was partially offset by a decrease in related operating expenses. The property sale resulted in a net loss on repossessed assets ~~also decreased $9.2~~of $3.9 million ~~as first~~in the third quarter of 2021. Net gain (loss) on repossessed assets in the second quarter of 2021 included a ~~$14.1~~$7.3 million gain on ~~the~~ sale of repossessed oil and gas ~~assets.~~assets, partially offset by an impairment of an oil and gas property.

Average loan balances decreased ~~$541~~$393 million or 32 percent and average customer deposits increased ~~$920~~$832 million or 65 percent over the ~~first~~second quarter of 2021.

- 14 -

Consumer Banking

Consumer Banking provides retail banking services through four primary distribution channels: traditional branches, the 24-hour ExpressBank call center, Internet banking and mobile banking. Consumer Banking also conducts mortgage banking activities through offices located outside of our Consumer Banking markets.

Consumer Banking contributed ~~$1.7~~$12.4 million to consolidated net income for the ~~second~~third quarter of 2021, a decrease of ~~$30.8~~$14.4 million compared to the ~~second~~third quarter of 2020, largely due to lower mortgage production volumes and compression of production revenue as a percentage of production volume combined with lower spreads on deposits sold to our Funds Management unit.

Table 10 -- Consumer Banking

(Dollars in thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Net interest revenue from external sources	Net interest revenue from external sources	$	17,552	$	18,795			$	(1,243)			(7)		%			$	16,686		$	866		5		%	Net interest revenue from external sources			$	16,967				$	15,821			$	1,146				7	%				$	17,552			$	(585)	(3)	%
Net interest revenue from internal sources	Net interest revenue from internal sources	7,393		20,475		(13,082)				(64)	%	4,288			3,105				72	%	Net interest revenue from internal sources		10,255				17,309						(7,054)				(41)		%			7,393					2,862				39		%
Total net interest revenue	Total net interest revenue	24,945		39,270		(14,325)				(36)	%	20,974			3,971				19	%	Total net interest revenue		27,222				33,130				(5,908)					(18)	%			24,945					2,277					9	%
Net loans charged off	Net loans charged off	425		535		(110)				(21)	%	1,136			(711)				(63)	%	Net loans charged off		928				79				849					1,075	%			425					503					118	%
Net interest revenue after net loans charged off	Net interest revenue after net loans charged off	24,520		38,735		(14,215)				(37)	%	19,838			4,682				24	%	Net interest revenue after net loans charged off		26,294				33,051				(6,757)					(20)	%			24,520					1,774					7	%

Fees and commissions revenue	Fees and commissions revenue	37,714		67,192		(29,478)				(44)	%	52,300			(14,586)				(28)	%	Fees and commissions revenue		44,405				67,974				(23,569)					(35)	%			37,714					6,691					18	%
Other losses, net	Other losses, net	—		—		—				N/A		(18)			18				N/A		Other losses, net		(4)				(166)				162					N/A				—					(4)					N/A
Other operating revenue	Other operating revenue	37,714		67,192		(29,478)				(44)	%	52,282			(14,568)				(28)	%	Other operating revenue		44,401				67,808				(23,407)					(35)	%			37,714					6,687					18	%

Personnel expense	Personnel expense	21,108		23,306		(2,198)				(9)	%	21,908			(800)				(4)	%	Personnel expense		21,284				22,794				(1,510)					(7)	%			21,108					176					1	%
Non-personnel expense	Non-personnel expense	31,345		34,943		(3,598)				(10)	%	33,714			(2,369)				(7)	%	Non-personnel expense		28,199				36,361				(8,162)					(22)	%			31,345					(3,146)					(10)	%
Total other operating expense	Total other operating expense	52,453		58,249		(5,796)				(10)	%	55,622			(3,169)				(6)	%	Total other operating expense		49,483				59,155				(9,672)					(16)	%			52,453					(2,970)					(6)	%

Net direct contribution	Net direct contribution	9,781		47,678		(37,897)				(79)	%	16,498			(6,717)				(41)	%	Net direct contribution		21,212				41,704				(20,492)					(49)	%			9,781					11,431					117	%
Gain (loss) on financial instruments, net	Gain (loss) on financial instruments, net	17,137		7,356		9,781				N/A		(29,616)			46,753				N/A		Gain (loss) on financial instruments, net		(5,949)				1,540				(7,489)					N/A				17,137					(23,086)					N/A
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	(13,041)		(761)		(12,280)				N/A		33,874			(46,915)				N/A		Change in fair value of mortgage servicing rights		12,945				3,441				9,504					N/A				(13,041)					25,986					N/A
Gain on repossessed assets, net	Gain on repossessed assets, net	—		27		(27)				N/A		41			(41)				N/A		Gain on repossessed assets, net		—				41				(41)					N/A				—					—					N/A
Corporate expense allocations	Corporate expense allocations	11,599		10,692		907				8	%	11,475			124				1	%	Corporate expense allocations		11,516				10,691��				825					8	%			11,599					(83)					(1)	%
Income before taxes	Income before taxes	2,278		43,608		(41,330)				(95)	%	9,322			(7,044)				(76)	%	Income before taxes		16,692				36,035				(19,343)					(54)	%			2,278					14,414					633	%
Federal and state income tax	Federal and state income tax	580		11,107		(10,527)				(95)	%	2,374			(1,794)				(76)	%	Federal and state income tax		4,260				9,180				(4,920)					(54)	%			580					3,680					634	%
Net income	Net income	$	1,698	$	32,501	$	(30,803)			(95)	%	$	6,948		$	(5,250)			(76)	%	Net income		$	12,432			$	26,855			$	(14,423)				(54)	%			$	1,698				$	10,734				632	%

Average assets	Average assets	$	10,087,488	$	9,920,005	$	167,483			2	%	$	9,755,539		$	331,949			3	%	Average assets		$	10,083,593			$	9,898,112			$	185,481				2	%			$	10,087,488				$	(3,895)				—	%
Average loans	Average loans	1,786,242		1,679,164		107,078				6	%	1,823,732			(37,490)				(2)	%	Average loans		1,763,705				1,825,865				(62,160)					(3)	%			1,786,242					(22,537)					(1)	%
Average deposits	Average deposits	8,469,043		7,587,246		881,797				12	%	8,082,443			386,600				5	%	Average deposits		8,516,942				7,940,973				575,969					7	%			8,469,043					47,899					1	%
Average invested capital	Average invested capital	249,061		258,558		(9,497)				(4)	%	256,188			(7,127)				(3)	%	Average invested capital		249,061				258,558				(9,497)					(4)	%			256,188					(7,127)					(3)	%

Certain percentage increases (decreases) in non-fees and commissions revenue are not meaningful for comparison purposes based on the nature of the item.

- 15 -

Net interest revenue from Consumer Banking activities declined by ~~$14.3~~$5.9 million or 3618 percent compared to the ~~second~~third quarter of 2020, primarily due to a decrease in the spread on deposits sold to our Funds Management ~~unit and a decrease in volume of securities held as an economic hedge of our mortgage servicing rights.~~unit. Average consumer deposits grew ~~$882~~$576 million over the ~~second~~third quarter of 2020 with interest-bearing transaction deposit balances increasing ~~$471~~$378 million or 1411 percent and demand deposit balances increasing ~~$405~~$193 million or 157 percent.

Fees and commissions revenue decreased ~~$29.5~~$23.6 million or 4435 percent compared to the ~~second~~third quarter of 2020. Mortgage banking revenue decreased ~~$32.7~~$25.6 million ~~from the first quarter of 2020~~ due to lower mortgage production volume and ~~gain on sale margin compression.~~compression in production revenue as a percentage of production volume. Deposit service charges increased ~~$2.2~~$1.5 million. Customer spending levels increased with the broader reopening of the U.S. economy, which resulted in increased overdraft fees and check card revenue compared to the prior year. Operating expense decreased ~~$5.8~~$9.7 million due to a decrease in mortgage banking costs and personnel expense. Corporate expense allocations were consistent with the ~~second~~third quarter of 2020.

Changes in the fair value of mortgage servicing rights, net of economic hedges, increased pre-tax net income for the ~~second~~third quarter of 2021 by ~~$4.1~~$7.0 million compared to a ~~$6.6~~$5.0 million increase in pre-tax net income in the ~~second~~third quarter of 2020.

Net interest revenue from Consumer Banking activities increased ~~$4.0~~$2.3 million or 199 percent compared to the ~~first~~second quarter of 2021, mainly due to favorable spreads on deposits sold to our Funds Management unit. Operating revenue ~~decreased $14.6~~increased $6.7 million compared to the ~~first~~second quarter of ~~2021 as~~2021. While mortgage production volume ~~declined and margins compressed.~~decreased $28 million to $615 million, production revenue as a percentage of production volumes increased 95 basis points resulting in a $5.1 million increase in mortgage banking revenues. Operating expense decreased ~~$3.2~~$3.0 million, primarily due to a decrease in mortgage banking costs.

~~Average consumer loans decreased $37 million or 2 percent. Average deposits increased $387 million or 5 percent.~~

- 16 -

Wealth Management

Wealth Management contributed ~~$31.1~~a record $41.4 million to consolidated net income in the ~~second~~third quarter of 2021, ~~a decrease~~an increase of ~~$2.3~~$10.2 million or 733 percent ~~compared to~~over the ~~second~~third quarter of 2020. Revenue attributed to the Wealth Management segment totaled ~~$131.1~~$153.2 million for the ~~second~~third quarter of 2021, ~~a $2.5~~an $18.5 million or 214 percent ~~decrease~~increase compared to the ~~second~~third quarter of 2020. ~~A seasonal~~Growth in agency residential mortgage trading volumes and higher margin market opportunities led to an increase in ~~fiduciary and asset management revenue was offset by decreased revenue~~trading related ~~to agency mortgage-backed trading activities.~~

revenue.

Table 11 -- Wealth Management

(Dollars in thousands)


		Three Months Ended June 30,				Increase (Decrease)				% Increase (Decrease)		Three Months Ended Mar. 31, 2021			Increase (Decrease)				% Increase (Decrease)				Three Months Ended September 30,								Increase (Decrease)					% Increase (Decrease)				Three Months Ended June 30, 2021					Increase (Decrease)					% Increase (Decrease)
		2021		2020														2021				2020
Net interest revenue from external sources	Net interest revenue from external sources	$	52,966	$	34,359			$	18,607			54		%			$	48,554		$	4,412		9		%	Net interest revenue from external sources			$	55,697				$	34,098			$	21,599				63	%				$	52,966			$	2,731	5	%
Net interest revenue from internal sources	Net interest revenue from internal sources	(673)		(7,479)		6,806				(91)	%	(200)			(473)				237	%	Net interest revenue from internal sources		(501)				(11,113)						10,612				(95)		%			(673)					172				(26)		%
Total net interest revenue	Total net interest revenue	52,293		26,880		25,413				95	%	48,354			3,939				8	%	Total net interest revenue		55,196				22,985				32,211					140	%			52,293					2,903					6	%
Net loans charged off (recovered)	Net loans charged off (recovered)	(54)		(89)		35				(39)	%	(29)			(25)				86	%	Net loans charged off (recovered)		(70)				(51)				(19)					37	%			(54)					(16)					30	%
Net interest revenue after net loans charged off (recovered)	Net interest revenue after net loans charged off (recovered)	52,347		26,969		25,378				94	%	48,383			3,964				8	%	Net interest revenue after net loans charged off (recovered)		55,266				23,036				32,230					140	%			52,347					2,919					6	%

Fees and commissions revenue	Fees and commissions revenue	78,841		106,757		(27,916)				(26)	%	65,684			13,157				20	%	Fees and commissions revenue		97,966				111,655				(13,689)					(12)	%			78,841					19,125					24	%
Other gains (losses), net	Other gains (losses), net	308		(83)		391				N/A		439			(131)				N/A		Other gains (losses), net		(78)				(503)				425					N/A				308					(386)					N/A
Other operating revenue	Other operating revenue	79,149		106,674		(27,525)				(26)	%	66,123			13,026				20	%	Other operating revenue		97,888				111,152				(13,264)					(12)	%			79,149					18,739					24	%

Personnel expense	Personnel expense	58,721		61,909		(3,188)				(5)	%	57,414			1,307				2	%	Personnel expense		65,802				62,508				3,294					5	%			58,721					7,081					12	%
Non-personnel expense	Non-personnel expense	20,708		18,658		2,050				11	%	21,151			(443)				(2)	%	Non-personnel expense		21,615				20,360				1,255					6	%			20,708					907					4	%
Other operating expense	Other operating expense	79,429		80,567		(1,138)				(1)	%	78,565			864				1	%	Other operating expense		87,417				82,868				4,549					5	%			79,429					7,988					10	%

Net direct contribution	Net direct contribution	52,067		53,076		(1,009)				(2)	%	35,941			16,126				45	%	Net direct contribution		65,737				51,320				14,417					28	%			52,067					13,670					26	%

Corporate expense allocations	Corporate expense allocations	10,343		8,204		2,139				26	%	9,887			456				5	%	Corporate expense allocations		10,101				9,397				704					7	%			10,343					(242)					(2)	%
Income before taxes	Income before taxes	41,724		44,872		(3,148)				(7)	%	26,054			15,670				60	%	Income before taxes		55,636				41,923				13,713					33	%			41,724					13,912					33	%
Federal and state income tax	Federal and state income tax	10,663		11,478		(815)				(7)	%	6,672			3,991				60	%	Federal and state income tax		14,230				10,711				3,519					33	%			10,663					3,567					33	%
Net income	Net income	$	31,061	$	33,394	$	(2,333)			(7)	%	$	19,382		$	11,679			60	%	Net income		$	41,406			$	31,212			$	10,194				33	%			$	31,061				$	10,345				33	%

Average assets	Average assets	$	19,201,041	$	15,721,452	$	3,479,589			22	%	$	18,645,865		$	555,176			3	%	Average assets		$	19,109,700			$	16,204,510			$	2,905,190				18	%			$	19,201,041				$	(91,341)				—	%
Average loans	Average loans	1,968,513		1,709,363		259,150				15	%	1,917,973			50,540				3	%	Average loans		1,971,380				1,777,008				194,372					11	%			1,968,513					2,867					—	%
Average deposits	Average deposits	9,695,319		8,385,681		1,309,638				16	%	9,706,295			(10,976)				—	%	Average deposits		9,120,446				9,090,116				30,330					—	%			9,695,319					(574,873)					(6)	%
Average invested capital	Average invested capital	312,148		295,245		16,903				6	%	313,355			(1,207)				—	%	Average invested capital		312,148				295,245				16,903					6	%			313,355					(1,207)					—	%

Combined net interest revenue and fee revenue from our agency mortgage-backed securities trading activities ~~decreased~~increased by ~~$2.6~~$9.7 million or 414 percent compared to the prior year. Fiduciary and asset management revenue increased ~~$3.7~~$5.3 million. Growth in trust fees and managed account fees as a result of higher client asset balances, was partially offset by a combination of lower mutual fund fees and increased fee waivers. ~~Other Wealth Management revenue decreased primarily~~Operating expense increased $4.5 million largely due to higher trading related ~~to a decrease in the spread on deposits sold to our Funds Management unit, partially offset by growth in private banking average loan balances.~~incentive compensation expense.

Operating expense decreased $1.1 million as a $3.2 million decrease in personnel expense was partially offset by a $2.1 million increase in non-personnel expense. Corporate expense allocations increased $2.1 million comparedAverage loans attributed to the ~~second quarter of 2020.~~Wealth Management segment increased $194 million or 11 percent.

- 17 -

Average loans attributed to the Wealth Management segment increased $259 million or 15 percent. Average deposits increased $1.3 billion or 16 percent, largely due to core growth as customers are retaining higher balances in the current economic environment.

Net income for Wealth Management increased ~~$11.7~~$10.3 million or 6033 percent compared to the ~~first~~second quarter of 2021. Combined net interest revenue and fee revenue increased ~~$17.1~~$22.0 million. ~~Brokerage and trading revenue and related net interest revenue increased $10.5 million to $62.2 million due to growth in~~Revenue primarily from agency residential mortgage trading ~~volumes and~~activity increased $15.4 million to $77.3 million due to higher margin market opportunities. ~~Fiduciary and asset management fees grew as a result of higher client asset balances. Assets under management were $96.6 billion, an increase of $4.7 billion compared~~Operating expense increased $8.0 million, primarily due to ~~the prior quarter.~~incentive compensation costs related to increased trading activity.

Average loans ~~grew 3 percent~~were consistent compared to ~~$2.0 billion~~the prior quarter and average deposits ~~were consistent with prior quarter.~~decreased $575 million or 6 percent.

Financial Condition

Securities

We maintain a securities portfolio to enhance profitability, manage interest rate risk, provide liquidity and comply with regulatory requirements. Securities are classified as trading, held for investment, or available for sale. See Note 2 to the Consolidated Financial Statements for the composition of the securities portfolio as of ~~June~~September 30, 2021 and December 31, 2020.

We hold an inventory of trading securities in support of sales to a variety of customers, including banks, corporations, insurance companies, money managers and others. Trading securities ~~increased $613~~decreased $145 million to ~~$5.7~~$5.6 billion during the ~~second~~third quarter of 2021. As discussed in the Market Risk section of this report, trading activities involve risk of loss from adverse price movement. We mitigate this risk within board-approved limits through the use of derivative contracts, short-sales and other techniques. These limits remain relatively unchanged from levels set before our expanded trading activities.

At ~~June~~September 30, 2021, the carrying value of investment (held-to-maturity) securities was ~~$221~~$216 million, including a ~~$493~~$470 thousand allowance for expected credit losses compared to ~~$226~~$221 million at ~~March 31,~~June 30, 2021 with a ~~$617~~$493 thousand allowance for expected credit losses. The fair value of investment securities was $238 million at September 30, 2021 and $246 million at June 30, ~~2021 and $253 million at March 31,~~ 2021. Investment securities consist primarily of residential mortgage-backed securities issued by U.S. government agencies, long-term, fixed rate Oklahoma and Texas municipal bonds, and taxable Texas school construction bonds.

Available for sale securities, which may be sold prior to maturity, are carried at fair value. Unrealized gains or losses, net of deferred taxes, are recorded as accumulated other comprehensive income in shareholders’ equity. The amortized cost of available for sale securities totaled ~~$13.0~~$13.1 billion at ~~June~~September 30, 2021, a ~~$99~~$100 million ~~decrease~~increase compared to ~~March 31,~~June 30, 2021. At ~~June~~September 30, 2021, the available for sale securities portfolio consisted primarily of U.S. government agency residential mortgage-backed securities and U.S. government agency commercial mortgage-backed securities. Both residential and commercial mortgage-backed securities have credit risk from delinquency or default of the underlying loans. We mitigate this risk by primarily investing in securities issued by U.S. government agencies. Principal and interest payments on the underlying loans are fully guaranteed. Commercial mortgage-backed securities have prepayment penalties similar to commercial loans.

A primary risk of holding residential mortgage-backed securities comes from extension during periods of rising interest rates or prepayment during periods of falling interest rates. We evaluate this risk through extensive modeling of risk both before making an investment and throughout the life of the security. Our best estimate of the duration of the combined residential mortgage-backed securities portfolio held in investment and available for sale securities at ~~June~~September 30, 2021 is ~~2.7~~3.0 years. Management estimates the duration extends to ~~4.1~~4.0 years assuming an immediate 200 basis point upward shock. The estimated duration contracts to ~~1.8~~2.0 years assuming a 100 basis point decline in the current low rate environment.

- 18 -

Loans

The aggregate loan portfolio before allowance for loan losses totaled ~~$21.4~~$20.3 billion at ~~June~~September 30, 2021, a $1.1 billion decrease compared to ~~March 31,~~June 30, 2021, primarily due to a decrease in PPP loan ~~balances. Paydowns~~balances and to a lesser extent, paydowns of energy and commercial real estate ~~portfolios, were partially offset by an increase in healthcare and personal~~ loans.

Table 12 -- Loans

(In thousands)


		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Commercial:	Commercial:											Commercial:
Healthcare												Healthcare	$	3,347,641	$	3,381,261	$	3,290,758	$	3,305,990	$	3,325,790
Services	Services	$	3,389,756	$	3,421,948	$	3,508,583	$	3,545,825	$	3,779,881	Services	3,323,422		3,389,756		3,421,948		3,508,583		3,545,825
Healthcare		3,381,261		3,290,758		3,305,990		3,325,790		3,289,343
Energy	Energy	3,011,331		3,202,488		3,469,194		3,717,101		3,974,174		Energy	2,814,059		3,011,331		3,202,488		3,469,194		3,717,101
General business	General business	2,690,559		2,742,590		2,793,768		2,976,990		3,115,112		General business	2,690,018		2,690,559		2,742,590		2,793,768		2,976,990
Total commercial	Total commercial	12,472,907		12,657,784		13,077,535		13,565,706		14,158,510		Total commercial	12,175,140		12,472,907		12,657,784		13,077,535		13,565,706

Commercial real estate:	Commercial real estate:											Commercial real estate:
Office	Office	1,073,346		1,094,060		1,085,257		1,099,563		973,995		Office	1,030,755		1,073,346		1,094,060		1,085,257		1,099,563
Industrial												Industrial	890,316		824,577		789,437		810,510		792,389
Multifamily	Multifamily	964,824		1,227,915		1,328,045		1,387,461		1,407,107		Multifamily	875,586		964,824		1,227,915		1,328,045		1,387,461
Industrial		824,577		789,437		810,510		792,389		723,005
Retail	Retail	784,445		787,648		796,223		786,211		780,467		Retail	766,402		784,445		787,648		796,223		786,211
Residential construction and land development	Residential construction and land development	128,939		119,079		119,394		121,258		136,911		Residential construction and land development	118,416		128,939		119,079		119,394		121,258
Other commercial real estate	Other commercial real estate	470,861		485,208		559,109		506,818		532,659		Other commercial real estate	435,417		470,861		485,208		559,109		506,818
Total commercial real estate	Total commercial real estate	4,246,992		4,503,347		4,698,538		4,693,700		4,554,144		Total commercial real estate	4,116,892		4,246,992		4,503,347		4,698,538		4,693,700

Paycheck protection program	Paycheck protection program	1,121,583		1,848,550		1,682,310		2,097,325		2,081,428		Paycheck protection program	536,052		1,121,583		1,848,550		1,682,310		2,097,325

Loans to individuals:	Loans to individuals:											Loans to individuals:
Residential mortgage	Residential mortgage	1,772,627		1,797,478		1,863,003		1,849,144		1,813,442		Residential mortgage	1,747,243		1,772,627		1,797,478		1,863,003		1,849,144
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	413,806		420,051		408,687		384,247		322,269		Residential mortgage guaranteed by U.S. government agencies	376,986		413,806		420,051		408,687		384,247
Personal	Personal	1,388,534		1,306,637		1,277,447		1,213,178		1,226,097		Personal	1,395,623		1,388,534		1,306,637		1,277,447		1,213,178
Total loans to individuals	Total loans to individuals	3,574,967		3,524,166		3,549,137		3,446,569		3,361,808		Total loans to individuals	3,519,852		3,574,967		3,524,166		3,549,137		3,446,569

Total	Total	$	21,416,449	$	22,533,847	$	23,007,520	$	23,803,300	$	24,155,890	Total	$	20,347,936	$	21,416,449	$	22,533,847	$	23,007,520	$	23,803,300

Commercial

Commercial loans represent loans for working capital, facilities acquisition or expansion, purchases of equipment and other needs of commercial customers primarily located within our geographical footprint. These loans are underwritten individually and represent ongoing relationships based on a thorough knowledge of the customer, the customer’s industry and market. While commercial loans are generally secured by the customer’s assets including real property, inventory, accounts receivable, operating equipment, interests in mineral rights and other property and may also include personal guarantees of the owners and related parties, the primary source of repayment of the loans is the ongoing cash flow from operations of the customer’s business. In addition, revolving lines of credit are generally governed by a borrowing base. Inherent lending risks are centrally monitored on a continuous basis from underwriting throughout the life of the loan for compliance with commercial lending policies.

Commercial loans totaled ~~$12.5~~$12.2 billion or 5860 percent of the loan portfolio at ~~June~~September 30, 2021, a ~~$185~~$298 million decrease compared to ~~March 31,~~June 30, 2021, primarily due to paydowns in the energy loan portfolio.

Services and healthcare loan balances also decreased while general business loans were largely unchanged.

- 19 -

Approximately 76 percent of loans in this segment are located within our geographic footprint, based on collateral location. Loans for which the collateral location is less relevant, such as unsecured loans and reserve-based energy loans are categorized by the borrower's primary operating location. The largest concentration of loans in this segment outside of our footprint is California, totaling 54 percent of the segment.

Supporting the energy industry with loans to producers and other energy-related entities has been a hallmark of the Company since its founding and represents a large portion of our commercial loan portfolio. In addition, energy production and related industries have a significant impact on the economy in our primary markets. Loans collateralized by oil and gas properties are subject to a semi-annual engineering review by our internal staff of petroleum engineers. This review is used as the basis for developing the expected cash flows supporting the loan amount. The projected cash flows are discounted according to risk characteristics of the underlying oil and gas properties. Loans are evaluated to demonstrate with reasonable certainty that crude oil, natural gas and natural gas liquids can be recovered from known oil and gas reservoirs under existing economic and operating conditions at current pricing levels and with existing conventional equipment and operating methods and costs. As part of our evaluation of credit quality, we analyze rigorous stress tests over a range of commodity prices and take proactive steps to mitigate risk when appropriate.

Outstanding energy loans totaled ~~$3.0~~$2.8 billion or 14 percent of total loans at ~~June~~September 30, 2021, a ~~$191~~$197 million decrease compared to ~~March 31,~~June 30, 2021. Approximately ~~$2.2~~$2.0 billion of energy loans were to oil and gas producers, a ~~$148~~$192 million decrease compared to ~~March 31,~~June 30, 2021. While commodity prices have continued to improve, ~~and stabilize,~~ sourcing new loans sufficient to offset paydowns remains a challenge as existing borrowers continue to reduce leverage. The majority of this portfolio is first lien, senior secured, reserve-based lending, which we believe is the lowest risk form of energy lending. Approximately 6667 percent of the committed production loans are secured by properties primarily producing oil and 3433 percent of the committed production loans are secured by properties primarily producing natural gas.

Loans to midstream oil and gas companies totaled ~~$645~~$613 million at ~~June~~September 30, 2021, ~~largely unchanged~~a $32 million decrease compared to ~~March 31,~~June 30, 2021. Loans to borrowers that provide services to the energy industry totaled ~~$103~~$129 million at ~~June~~September 30, 2021, ~~a decrease~~an increase of ~~$33~~$26 million. Loans to other energy borrowers, including those engaged in wholesale or retail energy sales, totaled $27 million, ~~a $7.0 million decrease~~largely unchanged compared to the prior quarter.

Unfunded energy loan commitments were ~~$2.6~~$2.8 billion at ~~June~~September 30, 2021, a ~~$247~~$109 million increase over ~~March 31,~~June 30, 2021.

The healthcare sector of the loan portfolio totaled ~~$3.4~~$3.3 billion or 16 percent of total loans. Healthcare loans ~~grew by $91~~decreased $34 million ~~over March 31,~~compared to June 30, 2021, primarily driven by our senior housing sector. ~~Balances~~This was partially offset by growth in balances to hospital systems ~~were also up~~and other medical practices over the prior quarter. Healthcare sector loans consist primarily of loans for the development and operation of senior housing and care facilities, including independent living, assisted living and skilled nursing. Generally we loan to borrowers with a portfolio of multiple facilities that serves to help diversify risks specific to a single facility.

The services sector of the loan portfolio totaled ~~$3.4~~$3.3 billion or 16 percent of total loans, ~~largely unchanged~~a $66 million decrease compared to the prior quarter. Service sector loans consist of a large number of loans to a variety of businesses, including Native American tribal and state and local governments, Native American tribal casino operations, foundations and not-for-profit organizations, educational services and specialty trade contractors. Approximately $1.7 billion of the services category is made up of loans with individual balances of less than $10 million. Services sector loans are generally secured by the assets of the borrower with repayment coming from the cash flows of ongoing operations of the customer’s business.

General business loans ~~decreased $52 million to~~totaled $2.7 billion or 13 percent of total ~~loans.~~loans, largely unchanged compared to the prior quarter. General business loans consist of $1.4 billion of wholesale/retail loans and $1.3 billion of loans from other commercial industries.

We participate in shared national credits when appropriate to obtain or maintain business relationships with local customers. Shared national credits are defined by banking regulators as credits of $100 million or more and with three or more non-affiliated banks as participants. At ~~June~~September 30, 2021, the outstanding principal balance of these loans totaled ~~$3.8~~$3.5 billion, including ~~$1.6~~$1.4 billion of energy loans. Substantially all of these loans are to borrowers with local market relationships. We serve as the agent lender in approximately 22 percent of our shared national credits, based on dollars committed. We hold shared national credits to the same standard of analysis and perform the same level of review as internally originated credits. Our lending policies generally avoid loans in which we do not have the opportunity to maintain or achieve other business relationships with the customer. In addition to management’s quarterly assessment of credit risk, banking regulators annually review a sample of shared national credits for proper risk grading.

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Commercial Real Estate

Commercial real estate represents loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes generally within our geographical footprint. We require collateral values in excess of the loan amounts, demonstrated cash flows in excess of expected debt service requirements, equity investment in the project and a portion of the project already sold, leased or permanent financing already secured. The expected cash flows from all significant new or renewed income producing property commitments are stress tested to reflect the risks in varying interest rates, vacancy rates and rental rates. As with commercial loans, inherent lending risks are centrally monitored on a continuous basis from underwriting throughout the life of the loan for compliance with applicable lending policies.

The commercial real estate loan balance as a percentage of our total loan portfolio has ranged from 20 percent to 22 percent over the past five years. The outstanding balance of commercial real estate loans decreased ~~$256~~$130 million compared to ~~March 31,~~June 30, 2021. Borrowers continue to use this low interest rate environment to refinance to long-term, non-recourse markets. Multifamily residential loans, decreased ~~$263~~$89 million to ~~$965~~$876 million at ~~June~~September 30, 2021. Loans secured by office ~~buildings~~facilities decreased ~~$21~~$43 million to ~~$1.1~~$1.0 billion. Loans secured by other commercial real estate properties decreased ~~$14~~$35 million to ~~$471~~$435 million. Loans secured by industrial facilities increased ~~$35~~$66 million to ~~$825~~$890 million. ~~Loans secured by retail facilities were largely unchanged compared to March 31, 2021.~~

Approximately 69 percent of loans in this segment are in our geographic footprint based on collateral location. The largest concentration of loans in this segment outside our footprint is Utah, totaling 97 percent of the segment, followed by California at 5 percent. All other states represent less than 5 percent individually.

Paycheck Protection Program

We actively participate in programs initiated by the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), including the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") that began on April 3, 2020. PPP provides fully forgivable loans when utilized for qualified expenditures, including to help small businesses maintain payrolls during the COVID-19 pandemic. These loans have a contractual term of two years, though most are expected to be forgiven prior to maturity after completion of a compliance period. Loans are guaranteed and amounts forgiven will be reimbursed to the Company by the SBA. The loans carry a fixed interest rate of 1 percent. Interest plus loan fees, which vary depending on loan size, are accrued over the contractual life of the loan. Any unaccreted origination fees will be recognized when the loan is paid. The pace of forgiveness activity for the initial rounds of PPP loans has been slower than initially anticipated. At ~~June~~September 30, 2021, approximately ~~$461~~$85 million of PPP loans from the initial rounds ~~remains,~~remain outstanding, with an unaccreted origination fee balance of ~~$3.8 million.~~$480 thousand.

The Company also participated in the most recent round of ~~PPP, originating $661~~PPP. Approximately $451 million of ~~new~~ PPP loans ~~during~~from this ~~year, maintaining a focus on our existing client base to timely support their needs.~~round remain outstanding. The newest round of loans have a fixed interest rate of 1 percent and a contractual term of five years, but are expected to be forgiven prior to maturity. Unaccreted origination fees related to the 2021 vintage of PPP loans totaled ~~$24~~$15 million at ~~June~~September 30, 2021.

Loans to Individuals

Loans to individuals include residential mortgage and personal loans. Residential mortgage loans provide funds for our customers to purchase or refinance their primary residence or to borrow against the equity in their home. These loans are secured by a first or second mortgage on the customer's primary residence. These loans are made in accordance with underwriting policies we believe to be conservative and are fully documented. Loans may be individually underwritten or credit scored based on size and other criteria. Credit scoring is assessed based on significant credit characteristics including credit history, residential and employment stability.

In general, we sell the majority of our conforming fixed rate loan originations in the secondary market and retain the majority of our non-conforming and adjustable-rate mortgage loans. Our mortgage loan portfolio does not include payment option adjustable rate mortgage loans or adjustable rate mortgage loans with initial rates that are below market. Home equity loans are primarily first-lien and fully amortizing.

Residential mortgage, which includes home equity loans, and personal loans are made in accordance with underwriting policies we believe to be conservative and are fully documented. Loans may be individually underwritten or credit scored based on size and other criteria. Credit scoring is assessed based on significant credit characteristics including credit history, residential and employment stability.

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Personal loans consist primarily of loans to Wealth Management clients secured by the cash surrender value of insurance policies and marketable securities. It also includes direct loans secured by and for the purchase of automobiles, recreational and marine equipment as well as unsecured loans.

Approximately 9091 percent of the loans in this segment are secured by collateral located within our geographical footprint. Loans for which the collateral location is less relevant, such as unsecured loans are categorized by the borrower’s primary operating location.

Residential mortgage loans guaranteed by U.S. government agencies have limited credit exposure because of the agency guarantee. This amount includes residential mortgage loans previously sold into GNMA mortgage pools that the Company may repurchase when certain defined delinquency criteria are met. Because of this repurchase right, the Company is deemed to have regained effective control over these loans and must include them on the Consolidated Balance Sheet.

The Company secondarily evaluates loan portfolio performance based on the primary geographical market managing the loan. Loans attributed to a geographical market may not represent the location of the borrower or the collateral. All permanent mortgage loans serviced by our mortgage banking unit and held for investment by the Company are centrally managed by the Oklahoma market.

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Table 13-- Loans Managed by Primary Geographical Market

(In thousands)


		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Texas:	Texas:											Texas:
Commercial	Commercial	$	5,690,901	$	5,748,345	$	5,926,534	$	6,135,471	$	6,359,206	Commercial	$	5,815,562	$	5,690,901	$	5,748,345	$	5,926,534	$	6,135,471
Commercial real estate	Commercial real estate	1,403,751		1,511,714		1,519,217		1,523,226		1,413,108		Commercial real estate	1,383,871		1,403,751		1,511,714		1,519,217		1,523,226
Paycheck protection program	Paycheck protection program	342,933		537,899		501,079		614,970		612,133		Paycheck protection program	115,623		342,933		537,899		501,079		614,970
Loans to individuals	Loans to individuals	885,619		848,194		855,410		794,055		749,531		Loans to individuals	901,121		885,619		848,194		855,410		794,055
Total Texas	Total Texas	8,323,204		8,646,152		8,802,240		9,067,722		9,133,978		Total Texas	8,216,177		8,323,204		8,646,152		8,802,240		9,067,722

Oklahoma:	Oklahoma:											Oklahoma:
Commercial	Commercial	2,840,560		2,975,477		3,144,782		3,332,244		3,489,259		Commercial	2,590,887		2,840,560		2,975,477		3,144,782		3,332,244
Commercial real estate	Commercial real estate	552,673		597,840		597,733		608,448		596,419		Commercial real estate	552,184		552,673		597,840		597,733		608,448
Paycheck protection program	Paycheck protection program	242,880		468,002		413,108		487,247		442,518		Paycheck protection program	192,474		242,880		468,002		413,108		487,247
Loans to individuals	Loans to individuals	2,063,419		2,043,705		2,052,784		2,034,576		1,966,032		Loans to individuals	2,014,099		2,063,419		2,043,705		2,052,784		2,034,576
Total Oklahoma	Total Oklahoma	5,699,532		6,085,024		6,208,407		6,462,515		6,494,228		Total Oklahoma	5,349,644		5,699,532		6,085,024		6,208,407		6,462,515

Colorado:	Colorado:											Colorado:
Commercial	Commercial	1,904,182		1,910,826		1,929,320		1,993,364		2,085,294		Commercial	1,874,613		1,904,182		1,910,826		1,929,320		1,993,364
Commercial real estate	Commercial real estate	656,521		777,786		879,648		893,626		940,622		Commercial real estate	526,653		656,521		777,786		879,648		893,626
Paycheck protection program	Paycheck protection program	299,712		436,540		377,111		494,910		488,279		Paycheck protection program	140,470		299,712		436,540		377,111		494,910
Loans to individuals	Loans to individuals	262,796		264,759		264,295		257,832		265,359		Loans to individuals	249,298		262,796		264,759		264,295		257,832
Total Colorado	Total Colorado	3,123,211		3,389,911		3,450,374		3,639,732		3,779,554		Total Colorado	2,791,034		3,123,211		3,389,911		3,450,374		3,639,732

Arizona:	Arizona:											Arizona:
Commercial	Commercial	1,239,270		1,207,089		1,219,072		1,218,769		1,346,037		Commercial	1,194,801		1,239,270		1,207,089		1,219,072		1,218,769
Commercial real estate	Commercial real estate	705,497		667,766		726,111		702,291		698,818		Commercial real estate	734,174		705,497		667,766		726,111		702,291
Paycheck protection program	Paycheck protection program	104,946		208,481		211,725		272,114		318,961		Paycheck protection program	42,815		104,946		208,481		211,725		272,114
Loans to individuals	Loans to individuals	178,481		179,031		177,948		166,203		177,155		Loans to individuals	182,506		178,481		179,031		177,948		166,203
Total Arizona	Total Arizona	2,228,194		2,262,367		2,334,856		2,359,377		2,540,971		Total Arizona	2,154,296		2,228,194		2,262,367		2,334,856		2,359,377

Kansas/Missouri:	Kansas/Missouri:											Kansas/Missouri:
Commercial	Commercial	388,291		421,974		455,914		493,606		481,162		Commercial	336,414		388,291		421,974		455,914		493,606
Commercial real estate	Commercial real estate	406,055		395,590		366,821		352,663		314,926		Commercial real estate	408,001		406,055		395,590		366,821		352,663
Paycheck protection program	Paycheck protection program	41,954		60,741		56,011		80,230		76,724		Paycheck protection program	6,920		41,954		60,741		56,011		80,230
Loans to individuals	Loans to individuals	103,092		104,954		105,995		96,598		102,577		Loans to individuals	100,920		103,092		104,954		105,995		96,598
Total Kansas/Missouri	Total Kansas/Missouri	939,392		983,259		984,741		1,023,097		975,389		Total Kansas/Missouri	852,255		939,392		983,259		984,741		1,023,097

New Mexico:	New Mexico:											New Mexico:
Commercial	Commercial	304,804		307,395		303,833		288,374		308,090		Commercial	287,695		304,804		307,395		303,833		288,374
Commercial real estate	Commercial real estate	437,996		448,298		473,204		473,697		458,230		Commercial real estate	437,302		437,996		448,298		473,204		473,697
Paycheck protection program	Paycheck protection program	86,716		124,059		109,881		133,244		128,058		Paycheck protection program	31,444		86,716		124,059		109,881		133,244
Loans to individuals	Loans to individuals	68,177		70,491		75,665		79,890		83,470		Loans to individuals	66,651		68,177		70,491		75,665		79,890
Total New Mexico	Total New Mexico	897,693		950,243		962,583		975,205		977,848		Total New Mexico	823,092		897,693		950,243		962,583		975,205

Arkansas:	Arkansas:											Arkansas:
Commercial	Commercial	104,899		86,678		98,080		103,878		89,462		Commercial	75,168		104,899		86,678		98,080		103,878
Commercial real estate	Commercial real estate	84,499		104,353		135,804		139,749		132,021		Commercial real estate	74,707		84,499		104,353		135,804		139,749
Paycheck protection program	Paycheck protection program	2,442		12,828		13,395		14,610		14,755		Paycheck protection program	6,306		2,442		12,828		13,395		14,610
Loans to individuals	Loans to individuals	13,383		13,032		17,040		17,415		17,684		Loans to individuals	5,257		13,383		13,032		17,040		17,415
Total Arkansas	Total Arkansas	205,223		216,891		264,319		275,652		253,922		Total Arkansas	161,438		205,223		216,891		264,319		275,652

Total BOK Financial loans	Total BOK Financial loans	$	21,416,449	$	22,533,847	$	23,007,520	$	23,803,300	$	24,155,890	Total BOK Financial loans	$	20,347,936	$	21,416,449	$	22,533,847	$	23,007,520	$	23,803,300

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Off-Balance Sheet Commitments

We enter into certain off-balance sheet arrangements in the normal course of business as shown in Table 14. Loan commitments may be unconditional obligations to provide financing or conditional obligations that depend on the borrower’s financial condition, collateral value or other factors. Standby letters of credit are unconditional commitments to guarantee the performance of our customer to a third party. Since some of these commitments are expected to expire before being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

We have off-balance sheet commitments related to certain residential mortgage loans sold into mortgage-backed securities as part of our mortgage banking activities. We retain off-balance sheet credit risk related to losses in excess of amounts guaranteed by the U.S. Department of Veteran's Affairs ("VA").

We also have off-balance sheet credit risk related to certain residential mortgage loans primarily originated under community development loan programs that were sold to a U.S. government agency with full recourse prior to 2007. We are obligated to repurchase these loans for the life of these loans in the event of foreclosure for the unpaid principal and interest at the time of foreclosure. The majority of our conforming fixed rate loan originations are sold in the secondary market and we only retain repurchase obligations under standard underwriting representations and warranties.

Table 14 – Off-Balance Sheet Credit Commitments

(In thousands)


		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Loan commitments	Loan commitments	$	11,518,158	$	11,151,650	$	10,967,546	$	10,430,106	$	10,298,572	Loan commitments	$	12,044,695	$	11,518,158	$	11,151,650	$	10,967,546	$	10,430,160
Standby letters of credit	Standby letters of credit	671,878		713,834		681,467		678,136		693,177		Standby letters of credit	638,067		671,878		713,834		681,467		678,136
Unpaid principal balance of residential mortgage loans sold with recourse	Unpaid principal balance of residential mortgage loans sold with recourse	63,545		68,393		73,055		77,225		82,305		Unpaid principal balance of residential mortgage loans sold with recourse	57,988		63,545		68,393		73,055		77,225
Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veteran's Affairs	Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veteran's Affairs	1,225,100		1,326,300		1,442,504		1,574,272		1,715,025		Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veteran's Affairs	1,150,124		1,225,100		1,326,300		1,442,504		1,574,272

Customer Derivative Programs

We offer programs that permit our customers to hedge various risks, including fluctuations in energy, cattle and other agricultural product prices, interest rates and foreign exchange rates. Each of these programs work essentially the same way. Derivative contracts are executed between the customers and the Company. Offsetting contracts are executed between the Company and selected counterparties to minimize market risk due to changes in commodity prices, interest rates or foreign exchange rates. The counterparty contracts are identical to the customer contracts, except for a fixed pricing spread or a fee paid to us as compensation for administrative costs, credit risk and profit.

The customer derivative programs create credit risk for potential amounts due to the Company from our customers and from the counterparties. Customer credit risk is monitored through existing credit policies and procedures. The effects of changes in commodity prices, interest rates or foreign exchange rates are evaluated across a range of possible scenarios to determine the maximum exposure we are willing to have individually to any customer. Customers may also be required to provide cash margin or other collateral in conjunction with our credit agreements to further limit our credit risk.

Counterparty credit risk is evaluated through existing policies and procedures. This evaluation considers the total relationship between BOK Financial and each of the counterparties. Individual limits are established by management, approved by Credit Administration and reviewed by the Asset/Liability Committee. Margin collateral is required if the exposure between the Company and any counterparty exceeds established limits. Based on declines in the counterparties’ credit ratings, these limits may be reduced and additional margin collateral may be required.

A deterioration of the credit standing of one or more of the customers or counterparties to these contracts may result in BOK Financial recognizing a loss as the fair value of the affected contracts may no longer move in tandem with the offsetting contracts. This occurs if the credit standing of the customer or counterparty deteriorated such that either the fair value of underlying collateral no longer supported the contract or the customer or the counterparty’s ability to provide margin collateral was impaired. Credit losses on customer derivatives reduce brokerage and trading revenue in the Consolidated Statements of Earnings.

- 24 -

Derivative contracts are carried at fair value. At ~~June~~September 30, 2021, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under these programs totaled ~~$1.6~~$1.7 billion compared to ~~$880 million~~$1.6 billion at ~~March 31,~~June 30, 2021. At ~~June~~September 30, 2021, the net fair value of our derivative contracts included ~~$992 million~~$1.3 billion for energy contracts, ~~$569~~$299 million for foreign exchange contracts and ~~$72~~$63 million for interest rate swaps. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $1.7 billion at September 30, 2021 and $1.6 billion at June 30, ~~2021 and $865 million at March 31,~~ 2021.

At ~~June~~September 30, 2021, total derivative assets were reduced by ~~$1.2 million~~$932 thousand of cash collateral received from counterparties and total derivative liabilities were reduced by ~~$1.0~~$1.2 billion of cash collateral paid to counterparties related to instruments executed with the same counterparty under a master netting agreement. Derivative contracts executed with customers may be secured by non-cash collateral in conjunction with a credit agreement with that customer, such as proven producing oil and gas properties. Access to this collateral in event of default is reasonably assured.

A table showing the notional and fair value of derivative assets and liabilities on both a gross and net basis is presented in Note 3 to the Consolidated Financial Statements.

The fair value of derivative contracts reported as assets under these programs, net of cash margin held by the Company, by category of debtor at ~~June~~September 30, 2021 follows in Table 15.

Table 15 -- Fair Value of Derivative Contracts

(In thousands)


Customers	$	~~1,334,782~~1,514,871
Banks and other financial institutions	~~298,076~~179,560

Fair value of customer risk management program asset derivative contracts, net	$	~~1,632,858~~1,694,431

At ~~June~~September 30, 2021, our largest derivative exposure was to an energy customer for ~~$82~~$90 million.

Our customer derivative program also introduces liquidity and capital risk. We are required to provide cash margin to certain counterparties when the net negative fair value of the contracts exceeds established limits. Also, changes in commodity prices affect the amount of regulatory capital we are required to hold as support for the fair value of our derivative assets. These risks are modeled as part of the management of these programs. Based on current prices, a decrease in market prices equivalent to ~~$58.86~~$60.83 per barrel of oil would decrease the fair value of derivative assets by ~~$447~~$494 million, with ~~dealer counterparties~~energy producers comprising the bulk of the assets. An increase in prices equivalent to ~~$87.10~~$88.83 per barrel of oil would increase the fair value of derivative assets by ~~$373~~$304 million as margin received falls faster than the asset values. Liquidity requirements of this program may also be affected by our credit rating. At ~~June~~September 30, 2021, a decrease in our credit rating to below investment grade would increase our obligation to post cash margin on existing contracts by approximately $10 million. The fair value of our to-be-announced residential mortgage-backed securities and interest rate swap derivative contracts is affected by changes in interest rates. Based on our assessment as of ~~June~~September 30, 2021, changes in interest rates would not materially impact regulatory capital or liquidity needed to support this portion of our customer derivative program.

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Summary of Credit Loss Experience

Table 16 -- Summary of Credit Loss Experience

(In thousands)


		Three Months Ended																Three Months Ended
		June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			June 30, 2020				Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020
Allowance for loan losses:	Allowance for loan losses:																Allowance for loan losses:
Beginning balance	Beginning balance	$	352,402		$	388,640		419,777			435,597			315,311			Beginning balance	$	311,890		$	352,402		388,640			419,777			435,597
Loans charged off	Loans charged off	(18,304)			(16,905)			(18,251)			(26,661)			(15,570)			Loans charged off	(9,584)			(18,304)			(16,905)			(18,251)			(26,661)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	2,856			2,437			1,592			4,232			1,491			Recoveries of loans previously charged off	1,769			2,856			2,437			1,592			4,232
Net loans charged off	Net loans charged off	(15,448)			(14,468)			(16,659)			(22,429)			(14,079)			Net loans charged off	(7,815)			(15,448)			(14,468)			(16,659)			(22,429)
Provision for credit losses	Provision for credit losses	(25,064)			(21,770)			(14,478)			6,609			134,365			Provision for credit losses	(27,395)			(25,064)			(21,770)			(14,478)			6,609
Ending balance	Ending balance	$	311,890		$	352,402		$	388,640		$	419,777		$	435,597		Ending balance	$	276,680		$	311,890		$	352,402		$	388,640		$	419,777

Accrual for off-balance sheet credit risk from unfunded loan commitments:	Accrual for off-balance sheet credit risk from unfunded loan commitments:																Accrual for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	Beginning balance	$	32,877		$	36,921		27,969			32,919			28,514			Beginning balance	$	24,287		$	32,877		36,921			27,969			32,919
Provision for credit losses	Provision for credit losses	(8,590)			(4,044)			8,952			(4,950)			4,405			Provision for credit losses	4,952			(8,590)			(4,044)			8,952			(4,950)
Ending balance	Ending balance	$	24,287		$	32,877		$	36,921		$	27,969		$	32,919		Ending balance	$	29,239		$	24,287		$	32,877		$	36,921		$	27,969

Accrual for off-balance sheet credit risk associated with mortgage banking activities:	Accrual for off-balance sheet credit risk associated with mortgage banking activities:																Accrual for off-balance sheet credit risk associated with mortgage banking activities:
Beginning balance	Beginning balance	$	5,135		$	4,282		5,246			6,041			9,660			Beginning balance	$	3,828		$	5,135		4,282			5,246			6,041
Loans charged off	Loans charged off	(85)			(32)			(41)			(25)			(44)			Loans charged off	(30)			(85)			(32)			(41)			(25)
Provision for credit losses	Provision for credit losses	(1,222)			885			(923)			(770)			(3,575)			Provision for credit losses	(534)			(1,222)			885			(923)			(770)
Ending balance	Ending balance	$	3,828		$	5,135		$	4,282		$	5,246		$	6,041		Ending balance	$	3,264		$	3,828		$	5,135		$	4,282		$	5,246

Allowance for credit losses related to held-to-maturity (investment) securities:	Allowance for credit losses related to held-to-maturity (investment) securities:																Allowance for credit losses related to held-to-maturity (investment) securities:
Beginning balance	Beginning balance	$	617		$	688		$	739		$	1,628		$	1,502		Beginning balance	$	493		$	617		$	688		$	739		$	1,628
Provision for credit losses	Provision for credit losses	(124)			(71)			(51)			(889)			126			Provision for credit losses	(23)			(124)			(71)			(51)			(889)
Ending balance	Ending balance	$	493		$	617		$	688		$	739		$	1,628		Ending balance	$	470		$	493		$	617		$	688		$	739

Total provision for credit losses	Total provision for credit losses	$	(35,000)		$	(25,000)		$	(6,500)		$	—		$	135,195		Total provision for credit losses	$	(23,000)		$	(35,000)		$	(25,000)		$	(6,500)		$	—

Net charge-offs (annualized) to average loans	Net charge-offs (annualized) to average loans	0.28		%	0.25		%	0.28		%	0.37		%	0.23		%	Net charge-offs (annualized) to average loans	0.15		%	0.28		%	0.25		%	0.28		%	0.37		%
Net charge-offs (annualized) to average loans excluding PPP loans1	Net charge-offs (annualized) to average loans excluding PPP loans1	0.30		%	0.28		%	0.31		%	0.41		%	0.25		%	Net charge-offs (annualized) to average loans excluding PPP loans1	0.16		%	0.30		%	0.28		%	0.31		%	0.41		%
Recoveries to gross charge-offs	Recoveries to gross charge-offs	15.60		%	14.42		%	8.72		%	15.87		%	9.58		%	Recoveries to gross charge-offs	18.46		%	15.60		%	14.42		%	8.72		%	15.87		%
Provision for loan losses (annualized) to average loans	Provision for loan losses (annualized) to average loans	(0.45)		%	(0.38)		%	(0.25)		%	0.11		%	2.23		%	Provision for loan losses (annualized) to average loans	(0.53)		%	(0.45)		%	(0.38)		%	(0.25)		%	0.11		%
Allowance for loan losses to loans outstanding at period-end	Allowance for loan losses to loans outstanding at period-end	1.46		%	1.56		%	1.69		%	1.76		%	1.80		%	Allowance for loan losses to loans outstanding at period-end	1.36		%	1.46		%	1.56		%	1.69		%	1.76		%
Allowance for loan losses to loans outstanding at period-end excluding PPP loans1	Allowance for loan losses to loans outstanding at period-end excluding PPP loans1	1.54		%	1.70		%	1.82		%	1.93		%	1.97		%	Allowance for loan losses to loans outstanding at period-end excluding PPP loans1	1.40		%	1.54		%	1.70		%	1.82		%	1.93		%
Accrual for unfunded loan commitments to loan commitments	Accrual for unfunded loan commitments to loan commitments	0.21		%	0.29		%	0.34		%	0.27		%	0.32		%	Accrual for unfunded loan commitments to loan commitments	0.24		%	0.21		%	0.29		%	0.34		%	0.27		%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end	1.57		%	1.71		%	1.85		%	1.88		%	1.94		%	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end	1.50		%	1.57		%	1.71		%	1.85		%	1.88		%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end excluding PPP loans1	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end excluding PPP loans1	1.66		%	1.86		%	2.00		%	2.06		%	2.12		%	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end excluding PPP loans1	1.54		%	1.66		%	1.86		%	2.00		%	2.06		%

1 Metric meaningful due to the unique characteristics of the PPP loans.

- 26 -

Allowance for Loan Losses and Accrual for Off-Balance Sheet Credit Risk from Unfunded Loan Commitments

Expected credit losses on assets carried at amortized cost are recognized over their expected lives based on models that measure the probability of default and loss given default over a 12-month reasonable and supportable forecast period. Models incorporate base case, downside and upside macroeconomic variables such as real gross domestic product ("GDP") growth, civilian unemployment rate and West Texas Intermediate ("WTI") oil prices on a probability weighted basis. See Note 4 to the consolidated financial statements for additional discussion of methodology of allowance for loan losses.

A ~~$35.0~~$23.0 million negative provision for credit losses was recorded in the ~~second~~third quarter of ~~2021, primarily due to changes~~2021. Changes in our reasonable and supportable forecasts of macroeconomic variables, asprimarily due to strength in commodity prices and a ~~result of~~ continued ~~improvement~~optimistic outlook for growth in gross domestic product and the labor markets resulted in a $12.3 million decrease in the ~~economic outlook~~allowance for credit losses related to ~~the anticipated impact of the on-going COVID-19 pandemic and~~lending activities. Changes in loan portfolio characteristics, primarily related to improving credit quality ~~metrics. Decreased allowance due to~~metrics and lower loan balances ~~and decreased specific impairment were offset by charge-offs during~~resulted in a $10.1 million decrease in the ~~quarter.~~

allowance for credit losses related to lending activities.

- 27 -

The probability weighting of our base case reasonable and supportable forecast decreased to 65 percent in the third quarter of 2021 compared to 70 percent in the second quarter of 2021 as the level of uncertainty in the current economic outlook worsened slightly. Our reasonable and supportable forecast of macroeconomic variables ~~are~~is significantly influenced by the COVID-19 pandemic developments, ~~and related government stimulus policies,~~ which ~~remain~~remains highly uncertain. A summary of macroeconomic variables considered in developing our estimate of expected credit losses at ~~June~~September 30, 2021 follows:

Base

Downside

Upside

Base

Downside

Upside

Scenario probability weighting

70%

20%

10%

Scenario probability weighting

65%

25%

10%

COVID-19 trajectory

COVID-19 case levels continue to improve and normalize as virus immunity becomes increasingly widespread and proves effective against new virus strains.

Trajectory of COVID-19 pandemic worsens as additional surges stemming from new virus strains in areas of the country with lower vaccination rates as the U.S. enters the fall and winters months. The severity of the situation is compounded by uncertainty around vaccine durability and many states/regions are forced to reinstate restrictions.

COVID-19 case levels continue to improve and normalize as virus immunity becomes increasingly widespread and proves effective against new virus strains.

COVID-19 trajectory

COVID-19 case levels continue to improve from Delta variant wave as global virus immunity becomes more widespread and proves effective against severe virus outcomes as well as new virus strains.

New COVID-19 variants such as the recent Delta variant continue to emerge and spread in areas of the country with lower vaccination rates as the U.S. enters the fall and winter months. The severity of the situation is compounded by uncertainty around vaccine durability and many states/regions are forced to reinstate restrictions.

COVID-19 case levels continue to improve from Delta variant wave as global virus immunity becomes more widespread and proves effective against severe virus outcomes as well as new virus strains.

Economic recovery (driven by COVID-19 trajectory)

Continued easing of restrictions and the release of pent-up consumer demand results in GDP growth above historical averages through 2021, but begins to moderate in 2022.

Deteriorated COVID-19 situation, slow vaccine distribution and lack of Congressional support for additional fiscal stimulus results in a mild recession with conditions beginning to improve in the spring of 2022.

Continued easing of restrictions, the release of pent-up consumer demand and prolonged spending of excess savings results in GDP growth above historical averages for 2021 and 2022.

Economic recovery (driven by COVID-19 trajectory)

Increased labor participation, elevated consumer consumption and the need for inventory restocking produces above historical average GDP growth through mid-2022, but begins to moderate thereafter.

Increased labor participation, elevated consumer consumption and the need for inventory restocking produces above historical average GDP growth through late 2022, but begins to moderate thereafter.

Macro-economic factors

–GDP is forecasted to grow by 4.8 percent over the next 12 months.

–Civilian unemployment rate of 5.5 percent in the third quarter of 2021 improves to 4.7 percent by the second quarter of 2022.

–WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2021 and are expected to average $67.04 per barrel over the next 12 months.

–GDP is forecasted to grow 1.3 percent over the next 12 months.

–Civilian unemployment rate of 5.7 percent in the third quarter of 2021 increases in the next two quarters then levels off at 7.6 percent in the second quarter of 2022.

–WTI oil prices are projected to average $52.58 over the next 12 months.

–GDP is forecasted to grow by 6.4 percent over the next 12 months.

–Civilian unemployment rate of 5.1 percent in the third quarter of 2021 improves to 4.0 percent by the second quarter of 2022.

–WTI oil prices are projected to average $72.28 per barrel over the next 12 months.

Macro-economic factors

–GDP is forecasted to grow by 4.1 percent over the next 12 months.

–Civilian unemployment rate of 4.9 percent in the fourth quarter of 2021 improves to 4.5 percent by the third quarter of 2022.

–WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of September 2021 and are expected to average $68.38 per barrel over the next 12 months.

–GDP is forecasted to grow 2.0 percent in the fourth quarter of 2021, then contract in the first and second quarters of 2022 and return to growth of 1.0 percent in the third quarter of 2022.

–Civilian unemployment rate of 5.6 percent in the fourth quarter of 2021 increases in the next two quarters then levels off at 6.9 percent in the third quarter of 2022.

–WTI oil prices are projected to average $54.12 over the next 12 months.

–GDP is forecasted to grow by 4.8 percent over the next 12 months.

–Civilian unemployment rate of 4.6 percent in the fourth quarter of 2021 improves to 4.0 percent by the third quarter of 2022.

–WTI oil prices are projected to average $74.28 per barrel over the next 12 months.

Net charge-offs and changes in specific impairments attributed to certain credits required a ~~$9.2~~$4.2 million provision during the ~~second~~third quarter of 2021. This provision was offset primarily by a $5.6 million decrease in allowance related to lower outstanding loan ~~balances and changes in payment profile. There was a slight decrease in the provision for credit losses related to improved~~balances. Improved risk grading during the ~~quarter.~~quarter resulted in a $9.6 million decrease in the allowance for lending activities. Significant improvement in energy loans credit risk grading, as well as improvements in risk grading in services and residential mortgage and commercial real estate loans was partially offset by credit risk grade migration in ~~commercial real estate and residential mortgage loans.~~the healthcare loan portfolio. A summary of outstanding loan balances by risk grade is included in Note 4 to the Consolidated Financial Statements. Non-pass grade loans include other loans especially mentioned, defined by regulatory guidelines as loans that are currently performing in compliance with original terms but may have a potential weakness that deserves management’s close attention, accruing substandard loans, and nonaccruing loans. Non-pass grade loans totaled ~~$652~~$568 million at ~~June~~September 30, 2021, ~~a $208~~an $84 million decrease compared to ~~March 31.~~June 30. Non-pass graded loans were primarily composed of ~~$325~~$242 million or 119 percent of energy loans, ~~$117~~$86 million or 3 percent of services loans, ~~$62~~$74 million or 2 percent of healthcare loans, $68 million or 2 percent of commercial real estate loans and $55 million or 2 percent of general business ~~loans and $59 million or 1 percent of commercial real estate~~ loans.

- 28 -

The allowance for loan losses totaled ~~$312~~$277 million or ~~1.46~~1.36 percent of outstanding loans and ~~183~~208 percent of nonaccruing loans at ~~June~~September 30, 2021, excluding residential mortgage loans guaranteed by U.S. government agencies. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was ~~$336~~$306 million or ~~1.57~~1.50 percent of outstanding loans and ~~197~~230 percent of nonaccruing loans at ~~June~~September 30, 2021. Excluding PPP loans, the allowance for loan losses was ~~1.54~~1.40 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was ~~1.66~~1.54 percent.

~~- 28 -~~

The allowance for credit losses attributed to energy was ~~2.68~~2.51 percent of outstanding energy loans at ~~June~~September 30, 2021. Our semi-annual borrowing base redeterminations during the second quarter of 2021 were based on forward pricing curves that existed at that time and resulted in improved credit risk grading in our energy loan portfolio. Although energy prices have continued to improve, the pricing environment remains ~~fragile~~sensitive and tied to the continued economic recovery from the impact of the COVID-19 ~~pandemic.~~pandemic and other factors.

The Company recorded a ~~$25.0~~$35.0 million negative provision for credit losses in the ~~first~~second quarter of 2021. The allowance for loan losses was ~~$352~~$312 million or ~~1.56~~1.46 percent of outstanding loans and ~~170~~183 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies at ~~March 31,~~June 30, 2021. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was ~~$385~~$336 million or ~~1.71~~1.57 percent of outstanding loans and ~~186~~197 percent of nonaccruing loans. Excluding PPP loans, the allowance for loan losses was ~~1.70~~1.54 percent of outstanding loans and the combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was ~~1.86~~1.66 percent.

Net Loans Charged Off

Net charge-offs of commercial loans were ~~$14.6~~$6.1 million in the ~~second~~third quarter of 2021, primarily related to ~~three~~two general business borrowers and a single energy production ~~borrowers.~~borrower. Net commercial real estate loan charge-offs were ~~$624 thousand~~$1.2 million and net charge-offs of loans to individuals were ~~$197~~$474 thousand. Net charge-offs of loans to individuals include deposit account overdraft losses.

Accrual for Off-Balance Sheet Credit Risk Associated with Mortgage Banking Activities

The accrual for off-balance sheet credit risk associated with mortgage banking activities includes consideration of credit risk related to certain residential mortgage loans sold into mortgage-backed securities in excess of amounts guaranteed by the U.S. Department of Veteran's Affairs ("VA") and mortgage loans originated under community development loan programs that were sold to a U.S. government agency with full recourse.

We use publicly available long-term national data to estimate total loss given default for our off-balance sheet credit risk related to losses in excess of amounts guaranteed by the VA. This result is combined with probability of default output from our mortgage servicing rights model to estimate total expected loss. Then, we estimate the VA's guarantee percentage to determine our portion of the credit risk. Qualitative adjustment may be used, if necessary.

Allowance for Credit Losses Related to Held-to-Maturity (Investment) Securities

The expected credit losses principles apply to all financial assets measured at cost, including our held-to-maturity (investment) debt securities portfolio. Our investment portfolio includes municipal and other tax-exempt securities and other debt securities. Expected credit losses for these assets is based on probability of default and loss given default assumptions that align with similarly graded loans. Qualitative adjustment may be used, if necessary.

- 29 -

Nonperforming Assets

As more fully described in Note 4 to the Consolidated Financial Statements, loans are generally classified as nonaccruing when it becomes probable that we will not collect the full contractual principal and interest. Accruing renegotiated loans guaranteed by U.S. government agencies represent residential mortgage loans that have been modified in troubled debt restructurings. Interest continues to accrue based on the modified terms of the loan and loans may be sold once they become eligible according to U.S. government agency guidelines. Real estate and other repossessed assets are assets acquired in partial or total forgiveness of loans. The assets are carried at the lower of cost as determined by fair value at the date of foreclosure or current fair value, less estimated selling costs. A summary of nonperforming assets follows in Table 17:

Table 17 -- Nonperforming Assets

(In thousands)


		June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			June 30, 2020				Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020
Nonaccruing loans:	Nonaccruing loans:																Nonaccruing loans:
Commercial:	Commercial:																Commercial:
Energy	Energy	$	70,341		$	101,800		$	125,059		$	126,816		$	162,989		Energy	$	45,500		$	70,341		$	101,800		$	125,059		$	126,816
Healthcare	Healthcare	527			3,187			3,645			3,645			3,645			Healthcare	509			527			3,187			3,645			3,645
Services	Services	29,913			28,033			25,598			25,817			21,032			Services	25,714			29,913			28,033			25,598			25,817
General business	General business	11,823			14,053			12,857			13,675			14,333			General business	8,951			11,823			14,053			12,857			13,675
Total commercial	Total commercial	112,604			147,073			167,159			169,953			201,999			Total commercial	80,674			112,604			147,073			167,159			169,953

Commercial real estate	Commercial real estate	26,123			27,243			27,246			12,952			13,956			Commercial real estate	21,223			26,123			27,243			27,246			12,952

Loans to individuals:	Loans to individuals:																Loans to individuals:
Residential mortgage	Residential mortgage	31,473			32,884			32,228			31,599			33,098			Residential mortgage	30,674			31,473			32,884			32,228			31,599
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	9,207			8,564			7,741			6,397			6,110			Residential mortgage guaranteed by U.S. government agencies	9,188			9,207			8,564			7,741			6,397
Personal	Personal	229			255			319			252			233			Personal	188			229			255			319			252
Total loans to individuals	Total loans to individuals	40,909			41,703			40,288			38,248			39,441			Total loans to individuals	40,050			40,909			41,703			40,288			38,248
Total nonaccruing loans	Total nonaccruing loans	179,636			216,019			234,693			221,153			255,396			Total nonaccruing loans	141,947			179,636			216,019			234,693			221,153
Accruing renegotiated loans guaranteed by U.S. government agencies	Accruing renegotiated loans guaranteed by U.S. government agencies	171,324			154,591			151,775			142,770			114,571			Accruing renegotiated loans guaranteed by U.S. government agencies	178,554			171,324			154,591			151,775			142,770
Real estate and other repossessed assets	Real estate and other repossessed assets	57,337			70,911			90,526			52,847			35,330			Real estate and other repossessed assets	28,770			57,337			70,911			90,526			52,847
Total nonperforming assets	Total nonperforming assets	$	408,297		$	441,521		$	476,994		$	416,770		$	405,297		Total nonperforming assets	$	349,271		$	408,297		$	441,521		$	476,994		$	416,770
Total nonperforming assets excluding those guaranteed by U.S. government agencies	Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	227,766		$	278,366		$	317,478		$	267,603		$	284,616		Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	161,529		$	227,766		$	278,366		$	317,478		$	267,603

Allowance for loan losses to nonaccruing loans1	Allowance for loan losses to nonaccruing loans1	183.00		%	169.87		%	171.24		%	195.47		%	174.74		%	Allowance for loan losses to nonaccruing loans1	208.41		%	183.00		%	169.87		%	171.24		%	195.47		%
Nonperforming assets to outstanding loans and repossessed assets	Nonperforming assets to outstanding loans and repossessed assets	1.90		%	1.95		%	2.07		%	1.75		%	1.68		%	Nonperforming assets to outstanding loans and repossessed assets	1.71		%	1.90		%	1.95		%	2.07		%	1.75		%
Nonperforming assets to outstanding loans and repossessed assets excluding residential mortgage and PPP loans guaranteed by U.S. government agencies1,2		1.14		%	1.37		%	1.51		%	1.25		%	1.31		%
Nonperforming assets to outstanding loans and repossessed assets1,2																	Nonperforming assets to outstanding loans and repossessed assets1,2	0.83		%	1.14		%	1.37		%	1.51		%	1.25		%
Nonaccruing commercial loans to outstanding commercial loans	Nonaccruing commercial loans to outstanding commercial loans	0.90		%	1.16		%	1.28		%	1.25		%	1.43		%	Nonaccruing commercial loans to outstanding commercial loans	0.66		%	0.90		%	1.16		%	1.28		%	1.25		%
Nonaccruing commercial real estate loans to outstanding commercial real estate loans	Nonaccruing commercial real estate loans to outstanding commercial real estate loans	0.62		%	0.60		%	0.58		%	0.28		%	0.31		%	Nonaccruing commercial real estate loans to outstanding commercial real estate loans	0.52		%	0.62		%	0.60		%	0.58		%	0.28		%
Nonaccruing loans to individuals to outstanding loans to individuals1	Nonaccruing loans to individuals to outstanding loans to individuals1	1.00		%	1.07		%	1.04		%	1.04		%	1.10		%	Nonaccruing loans to individuals to outstanding loans to individuals1	0.98		%	1.00		%	1.07		%	1.04		%	1.04		%

1 Excludes residential mortgages guaranteed by U.S. government agencies.

2 Excludes residential mortgage and PPP loans guaranteed by U.S. government agencies.

~~- 30 -~~

Excluding assets guaranteed by U.S. government agencies, nonperforming assets decreased ~~$51~~$66 million from ~~March 31,~~June 30, 2021, primarily due to a ~~$31~~$25 million decrease in nonaccruing energy loans and a ~~$14~~$29 million decrease in real estate and other repossessed assets. Newly identified nonaccruing loans totaled ~~$13~~$21 million, offset by ~~$31~~$42 million of payments and ~~$18~~$10 million of charge-offs. The Company generally retains nonperforming assets to maximize potential recovery, which may cause future nonperforming assets to decrease more slowly.

- 30 -

A rollforward of nonperforming assets for the three and ~~six~~nine months ended ~~June~~September 30, 2021 follows in Table 18.

~~- 31 -~~

Table 18 -- Rollforward of Nonperforming Assets

(In thousands)


		Three Months Ended															Three Months Ended
		June 30, 2021															September 30, 2021
		Nonaccruing Loans															Nonaccruing Loans
		Commercial		Commercial Real Estate		Loan to Individuals		Total		Renegotiated Loans		Real Estate and Other Repossessed Assets		Total Nonperforming Assets			Commercial		Commercial Real Estate		Loan to Individuals		Total		Renegotiated Loans		Real Estate and Other Repossessed Assets		Total Nonperforming Assets
Balance, March 31, 2021		$	147,073	$	27,243	$	41,703	$	216,019	$	154,591	$	70,911	$	441,521
Balance, June 30, 2021																Balance, June 30, 2021	$	112,604	$	26,123	$	40,909	$	179,636	$	171,324	$	57,337	$	408,297
Additions	Additions	6,866		—		6,275		13,141		23,852		—		36,993		Additions	16,569		—		4,826		21,395		19,273		—		40,668

Transfers from premises and equipment																Transfers from premises and equipment	—		—		—		—		—		217		217
Payments	Payments	(24,833)		(320)		(5,499)		(30,652)		(929)		—		(31,581)		Payments	(34,009)		(3,478)		(4,058)		(41,545)		(983)		—		(42,528)
Charge-offs	Charge-offs	(16,502)		(800)		(1,002)		(18,304)		—		—		(18,304)		Charge-offs	(6,979)		(1,422)		(1,183)		(9,584)		—		—		(9,584)
Net gains (losses) and write-downs	Net gains (losses) and write-downs	—		—		—		—		—		3,624		3,624		Net gains (losses) and write-downs	—		—		—		—		—		(3,871)		(3,871)
Foreclosure of nonperforming loans	Foreclosure of nonperforming loans	—		—		(142)		(142)		—		142		—		Foreclosure of nonperforming loans	(7,511)		—		(375)		(7,886)		—		7,886		—
Foreclosure of loans guaranteed by U.S. government agencies	Foreclosure of loans guaranteed by U.S. government agencies	—		—		(994)		(994)		—		—		(994)		Foreclosure of loans guaranteed by U.S. government agencies	—		—		(672)		(672)		(131)		—		(803)
Proceeds from sales	Proceeds from sales	—		—		—		—		(5,831)		(17,340)		(23,171)		Proceeds from sales	—		—		—		—		(10,646)		(32,799)		(43,445)

Net transfers to nonaccruing loans	Net transfers to nonaccruing loans	—		—		714		714		(714)		—		—		Net transfers to nonaccruing loans	—		—		603		603		(603)		—		—
Return to accrual status	Return to accrual status	—		—		(146)		(146)		—		—		(146)		Return to accrual status	—		—		—		—		—		—		—
Other, net	Other, net	—		—		—		—		355		—		355		Other, net	—		—		—		—		320		—		320
Balance, June 30, 2021		$	112,604	$	26,123	$	40,909	$	179,636	$	171,324	$	57,337	$	408,297
Balance, September 30, 2021																Balance, September 30, 2021	$	80,674	$	21,223	$	40,050	$	141,947	$	178,554	$	28,770	$	349,271

		Six Months Ended															Nine Months Ended
		June 30, 2021															September 30, 2021
		Nonaccruing Loans															Nonaccruing Loans
		Commercial		Commercial Real Estate		Loan to Individuals		Total		Renegotiated Loans		Real Estate and Other Repossessed Assets		Total Nonperforming Assets			Commercial		Commercial Real Estate		Loan to Individuals		Total		Renegotiated Loans		Real Estate and Other Repossessed Assets		Total Nonperforming Assets
Balance, Dec. 31, 2020	Balance, Dec. 31, 2020	$	167,159	$	27,246	$	40,288	$	234,693	$	151,775	$	90,526	$	476,994	Balance, Dec. 31, 2020	$	167,159	$	27,246	$	40,288	$	234,693	$	151,775	$	90,526	$	476,994
Additions	Additions	25,794		327		11,605		37,726		36,552		8,688		82,966		Additions	42,363		327		16,431		59,121		55,825		8,688		123,634
Transfers from premises and equipment																Transfers from premises and equipment	—		—		—		—		—		217		217
Payments	Payments	(48,502)		(387)		(8,021)		(56,910)		(1,628)		—		(58,538)		Payments	(82,511)		(3,865)		(12,079)		(98,455)		(2,611)		—		(101,066)
Charge-offs	Charge-offs	(31,847)		(1,063)		(2,299)		(35,209)		—		—		(35,209)		Charge-offs	(38,826)		(2,485)		(3,482)		(44,793)		—		—		(44,793)
Net gains (losses) and write-downs	Net gains (losses) and write-downs	—		—		—		—		—		16,782		16,782		Net gains (losses) and write-downs	—		—		—		—		—		12,911		12,911
Foreclosure of nonperforming loans	Foreclosure of nonperforming loans	—		—		(289)		(289)		—		289		—		Foreclosure of nonperforming loans	(7,511)		—		(664)		(8,175)		—		8,175		—
Foreclosure of loans guaranteed by U.S. government agencies	Foreclosure of loans guaranteed by U.S. government agencies	—		—		(1,220)		(1,220)		(122)		—		(1,342)		Foreclosure of loans guaranteed by U.S. government agencies	—		—		(1,892)		(1,892)		(253)		—		(2,145)
Proceeds from sales	Proceeds from sales	—		—		—		—		(14,745)		(58,948)		(73,693)		Proceeds from sales	—		—		—		—		(25,391)		(91,747)		(117,138)
Net transfers to nonaccruing loans	Net transfers to nonaccruing loans	—		—		1,138		1,138		(1,138)		—		—		Net transfers to nonaccruing loans	—		—		1,741		1,741		(1,741)		—		—
Return to accrual status	Return to accrual status	—		—		(293)		(293)		—		—		(293)		Return to accrual status	—		—		(293)		(293)		—		—		(293)
Other, net	Other, net	—		—		—		—		630		—		630		Other, net	—		—		—		—		950		—		950
Balance, June 30, 2021		$	112,604	$	26,123	$	40,909	$	179,636	$	171,324	$	57,337	$	408,297
Balance, September 30, 2021																Balance, September 30, 2021	$	80,674	$	21,223	$	40,050	$	141,947	$	178,554	$	28,770	$	349,271

- 31 -

We foreclose on loans guaranteed by U.S. government agencies in accordance with agency guidelines. Generally these loans are not eligible for modification programs or have failed to comply with modified loan terms. Principal is guaranteed by agencies of the U.S. government, subject to limitations and credit risk is limited. At foreclosure, these amounts are transferred to claims receivable accounts. These properties will be conveyed to the agencies once applicable criteria have been met.

~~- 32 -~~

Real Estate and Other Repossessed Assets

Real estate and other repossessed assets totaled ~~$57~~$29 million at ~~June~~September 30, 2021, composed primarily of ~~$36~~$17 million of developed commercial real estate, $7.1 million of oil and gas properties, including a consolidated limited liability corporation that is 60% owned by the Company and 40% owned by an unrelated financial institution. The remaining balance of real estate and repossessed assets included $18 million of developed commercial real estate, $1.7 million of equipment, $1.6$1.9 million of undeveloped land primarily zoned for commercial development and ~~$374 thousand~~$1.7 million of ~~1-4 family residential properties.~~equipment. Real estate and other repossessed assets totaled ~~$71~~$57 million at ~~March 31,~~June 30, 2021. The decrease compared to ~~March 31~~June 30 was primarily due to the sale of certain repossessed oil and gas properties.

- 3332 -

Liquidity and Capital

Based on the average balances for the ~~second~~third quarter of 2021, approximately 7576 percent of our funding was provided by deposit accounts, 118 percent from borrowed funds, less than 1 percent from long-term subordinated debt and 11 percent from equity. Our funding sources, which primarily include deposits and borrowings from the Federal Home Loan Banks and other banks, provide adequate liquidity to meet our operating needs.

Subsidiary Bank

Deposits and borrowed funds are the primary sources of liquidity for BOKF, NA, the wholly owned subsidiary bank of BOK Financial. We compete for retail and commercial deposits by offering a broad range of products and services and focusing on customer convenience. Retail deposit growth is supported through personal and small business checking, online bill paying services, mobile banking services, an extensive network of branch locations and ATMs and our ExpressBank call center. Commercial deposit growth is supported by offering treasury management and lockbox services. We also acquire brokered deposits when the cost of funds is advantageous to other funding sources.

Average deposits for the ~~second~~third quarter of 2021 totaled ~~$37.5~~$37.8 billion, a ~~$968~~$344 million increase over the ~~first~~second quarter of 2021. Continued deposit growth was primarily due to customers maintaining higher balances in the current economic environment, supplemented by inflows from government stimulus payments. ~~Interest-bearing transaction account balances increased $58 million.~~ Demand deposits grew by ~~$877~~$481 million and savings account balances were up ~~$83~~$15 million. Interest-bearing transaction account balances ~~increased $58~~decreased $55 million while certificate of deposit balances decreased ~~$50~~$97 million.

Table 19 - Average Deposits by Line of Business

(In thousands)


		Three Months Ended											Three Months Ended
		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Commercial Banking	Commercial Banking	$	17,049,772	$	16,130,168	$	15,373,673	$	15,375,450	$	14,599,225	Commercial Banking	$	17,881,673	$	17,049,772	$	16,130,168	$	15,373,673	$	15,375,450
Consumer Banking	Consumer Banking	8,469,043		8,082,443		7,993,971		7,940,973		7,587,246		Consumer Banking	8,516,942		8,469,043		8,082,443		7,993,971		7,940,973
Wealth Management	Wealth Management	9,695,319		9,706,295		9,589,814		9,090,116		8,385,681		Wealth Management	9,120,446		9,695,319		9,706,295		9,589,814		9,090,116
Subtotal	Subtotal	35,214,134		33,918,906		32,957,458		32,406,539		30,572,152		Subtotal	35,519,061		35,214,134		33,918,906		32,957,458		32,406,539
Funds Management and other	Funds Management and other	2,276,093		2,603,210		2,565,171		2,233,394		2,078,802		Funds Management and other	2,315,325		2,276,093		2,603,210		2,565,171		2,233,394
Total	Total	$	37,490,227	$	36,522,116	$	35,522,629	$	34,639,933	$	32,650,954	Total	$	37,834,386	$	37,490,227	$	36,522,116	$	35,522,629	$	34,639,933

Average Commercial Banking deposit balances increased ~~$920~~$832 million over the ~~first~~second quarter of 2021. Demand deposit balances were up ~~$517~~$395 million. Interest-bearing transaction account balances increased ~~$390~~$443 million. ~~Time deposits increased $11 million compared to the prior quarter.~~ Commercial customers continue to retain large cash reserves ~~primarily~~ due to a combination of factors including uncertainty about the economic environment and potential for growth, lack of preferable liquid alternatives and a desire to minimize deposit service charges through the earnings credit. The earnings credit is a non-cash method that enables commercial customers to offset deposit service charges based on account balances. Commercial deposit balances may decrease as the economic outlook improves and if short-term rates move higher, enhancing their investment alternatives.

Average Consumer Banking deposit balances increased ~~$387~~$48 million over the prior quarter. ~~Demand deposit balances grew by $188 million.~~ A ~~$145~~$58 million increase in interest-bearing transaction deposit balances and ~~an $80~~a $14 million increase in savings account balances were partially offset by a ~~$25~~$31 million decrease in time deposit balances. Demand deposit balances were largely unchanged compared to prior quarter.

Average Wealth Management deposits decreased ~~$11~~$575 million compared to the ~~first~~second quarter of 2021. A ~~$179~~$561 million decrease in interest bearing transaction accounts and a $58 million decrease in time deposit balances was partially offset by a $43 million increase in demand ~~deposit balances was offset by a $158 million decrease in interest-bearing transaction accounts and a $33 million decrease in time~~ deposit balances.

Average time deposits for the ~~second~~third quarter of 2021 included ~~$67~~$56 million of brokered deposits, a ~~$25~~$10 million decrease compared to the ~~first~~second quarter of 2021. Average interest-bearing transaction accounts for the ~~second~~third quarter included $2.0 billion of brokered deposits, a ~~$323~~$48 million ~~decrease compared to~~increase over the ~~first~~second quarter of 2021.

- 3433 -

The distribution of our period end deposit account balances among principal markets follows in Table 20.

Table 20 -- Period End Deposits by Principal Market Area

(In thousands)


		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Oklahoma:	Oklahoma:											Oklahoma:
Demand	Demand	$	4,985,542	$	4,823,436	$	4,329,205	$	4,493,978	$	4,378,786	Demand	$	5,080,162	$	4,985,542	$	4,823,436	$	4,329,205	$	4,493,978
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	12,065,844		12,828,070		12,603,658		12,586,449		11,438,549		Transaction	11,692,679		12,065,844		12,828,070		12,603,658		12,586,449
Savings	Savings	500,344		487,862		420,996		401,062		387,557		Savings	510,906		500,344		487,862		420,996		401,062
Time	Time	1,139,980		1,197,517		1,134,453		1,081,176		1,330,619		Time	1,039,866		1,139,980		1,197,517		1,134,453		1,081,176
Total interest-bearing	Total interest-bearing	13,706,168		14,513,449		14,159,107		14,068,687		13,156,725		Total interest-bearing	13,243,451		13,706,168		14,513,449		14,159,107		14,068,687
Total Oklahoma	Total Oklahoma	18,691,710		19,336,885		18,488,312		18,562,665		17,535,511		Total Oklahoma	18,323,613		18,691,710		19,336,885		18,488,312		18,562,665

Texas:	Texas:											Texas:
Demand	Demand	3,752,790		3,592,969		3,449,882		3,152,106		3,070,728		Demand	3,987,503		3,752,790		3,592,969		3,449,882		3,152,106
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	4,335,113		4,257,234		3,800,427		3,482,555		3,358,030		Transaction	4,985,465		4,335,113		4,257,234		3,800,427		3,482,555
Savings	Savings	160,805		154,406		139,173		136,787		128,892		Savings	165,043		160,805		154,406		139,173		136,787
Time	Time	346,577		368,086		383,062		438,337		476,867		Time	337,389		346,577		368,086		383,062		438,337
Total interest-bearing	Total interest-bearing	4,842,495		4,779,726		4,322,662		4,057,679		3,963,789		Total interest-bearing	5,487,897		4,842,495		4,779,726		4,322,662		4,057,679
Total Texas	Total Texas	8,595,285		8,372,695		7,772,544		7,209,785		7,034,517		Total Texas	9,475,400		8,595,285		8,372,695		7,772,544		7,209,785

Colorado:	Colorado:											Colorado:
Demand	Demand	1,991,343		2,115,354		2,168,404		2,057,603		2,096,075		Demand	2,158,596		1,991,343		2,115,354		2,168,404		2,057,603
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	2,159,819		2,100,135		2,170,485		1,861,763		1,816,604		Transaction	2,337,354		2,159,819		2,100,135		2,170,485		1,861,763
Savings	Savings	73,990		73,446		69,384		68,230		67,477		Savings	79,873		73,990		73,446		69,384		68,230
Time	Time	193,787		204,973		208,778		226,780		254,845		Time	184,002		193,787		204,973		208,778		226,780
Total interest-bearing	Total interest-bearing	2,427,596		2,378,554		2,448,647		2,156,773		2,138,926		Total interest-bearing	2,601,229		2,427,596		2,378,554		2,448,647		2,156,773
Total Colorado	Total Colorado	4,418,939		4,493,908		4,617,051		4,214,376		4,235,001		Total Colorado	4,759,825		4,418,939		4,493,908		4,617,051		4,214,376

New Mexico:	New Mexico:											New Mexico:
Demand	Demand	1,197,412		1,131,713		941,074		964,908		965,877		Demand	1,222,895		1,197,412		1,131,713		941,074		964,908
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	723,757		736,923		733,007		713,418		752,565		Transaction	837,630		723,757		736,923		733,007		713,418
Savings	Savings	105,837		103,591		91,646		85,463		80,242		Savings	107,615		105,837		103,591		91,646		85,463
Time	Time	174,665		181,863		186,307		200,525		222,370		Time	168,879		174,665		181,863		186,307		200,525
Total interest-bearing	Total interest-bearing	1,004,259		1,022,377		1,010,960		999,406		1,055,177		Total interest-bearing	1,114,124		1,004,259		1,022,377		1,010,960		999,406
Total New Mexico	Total New Mexico	2,201,671		2,154,090		1,952,034		1,964,314		2,021,054		Total New Mexico	2,337,019		2,201,671		2,154,090		1,952,034		1,964,314

- 3534 -


		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020
Arizona:	Arizona:											Arizona:
Demand	Demand	943,511		915,439		905,201		928,671		985,757		Demand	1,110,884		943,511		915,439		905,201		928,671
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	820,901		835,795		768,220		771,319		780,500		Transaction	784,614		820,901		835,795		768,220		771,319
Savings	Savings	13,496		13,235		12,174		11,498		15,669		Savings	16,468		13,496		13,235		12,174		11,498
Time	Time	30,012		30,997		32,721		36,929		42,318		Time	30,862		30,012		30,997		32,721		36,929
Total interest-bearing	Total interest-bearing	864,409		880,027		813,115		819,746		838,487		Total interest-bearing	831,944		864,409		880,027		813,115		819,746
Total Arizona	Total Arizona	1,807,920		1,795,466		1,718,316		1,748,417		1,824,244		Total Arizona	1,942,828		1,807,920		1,795,466		1,718,316		1,748,417

Kansas/Missouri:	Kansas/Missouri:											Kansas/Missouri:
Demand	Demand	463,339		478,370		426,738		405,360		427,795		Demand	488,595		463,339		478,370		426,738		405,360
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	978,160		991,510		960,237		616,797		526,635		Transaction	965,757		978,160		991,510		960,237		616,797
Savings	Savings	17,539		18,686		16,286		15,520		15,033		Savings	17,303		17,539		18,686		16,286		15,520
Time	Time	13,509		13,898		14,610		16,430		17,746		Time	13,040		13,509		13,898		14,610		16,430
Total interest-bearing	Total interest-bearing	1,009,208		1,024,094		991,133		648,747		559,414		Total interest-bearing	996,100		1,009,208		1,024,094		991,133		648,747
Total Kansas/Missouri	Total Kansas/Missouri	1,472,547		1,502,464		1,417,871		1,054,107		987,209		Total Kansas/Missouri	1,484,695		1,472,547		1,502,464		1,417,871		1,054,107

Arkansas:	Arkansas:											Arkansas:
Demand	Demand	46,472		45,889		45,834		44,712		67,147		Demand	41,594		46,472		45,889		45,834		44,712
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	195,125		141,207		122,388		164,439		177,535		Transaction	149,611		195,125		141,207		122,388		164,439
Savings	Savings	3,445		3,000		2,333		2,389		2,101		Savings	3,289		3,445		3,000		2,333		2,389
Time	Time	6,819		7,022		7,197		7,796		7,995		Time	6,677		6,819		7,022		7,197		7,796
Total interest-bearing	Total interest-bearing	205,389		151,229		131,918		174,624		187,631		Total interest-bearing	159,577		205,389		151,229		131,918		174,624
Total Arkansas	Total Arkansas	251,861		197,118		177,752		219,336		254,778		Total Arkansas	201,171		251,861		197,118		177,752		219,336
Total BOK Financial deposits	Total BOK Financial deposits	$	37,439,933	$	37,852,626	$	36,143,880	$	34,973,000	$	33,892,314	Total BOK Financial deposits	$	38,524,551	$	37,439,933	$	37,852,626	$	36,143,880	$	34,973,000

In addition to deposits, liquidity is provided primarily by federal funds purchased, securities repurchase agreements and Federal Home Loan Bank borrowings. Federal funds purchased consist primarily of unsecured, overnight funds acquired from other financial institutions. Funds are primarily purchased from bankers’ banks and Federal Home Loan banks from across the country. The Company has no wholesale federal funds purchased at ~~June~~September 30, 2021. Securities repurchase agreements generally mature within 90 days and are secured by certain available for sale and trading securities. Federal Home Loan Bank borrowings are generally short-term and are secured by a blanket pledge of eligible collateral (generally unencumbered U.S. Treasury and agency mortgage-backed securities, 1-4 family residential mortgage loans, multifamily and other qualifying commercial real estate loans). Amounts borrowed from the Federal Home Loan Bank of Topeka averaged ~~$2.1~~$1.9 billion during the quarter, compared to ~~$1.8~~$2.1 billion in the ~~first~~second quarter of 2021.

On April 13, 2020, the banking agencies published an interim final rule which permits banking organizations to exclude from regulatory capital requirements PPP covered loans pledged to the Federal Reserve's Paycheck Protection Program Liquidity Facility ("PPLF"). The Company initially funded PPP loans from deposits and Federal Home Loan Bank borrowings, but transitioned to the PPLF in June 2020 in order to realize this regulatory capital relief.

At ~~June~~September 30, 2021, the estimated unused credit available to BOKF, NA from collateralized sources was approximately ~~$16.9~~$17.4 billion.

A summary of other borrowings for BOK Financial on a consolidated basis follows in Table 21.

- 3635 -

Table 21 -- Borrowed Funds

(In thousands)


				Three Months Ended June 30, 2021							Three Months Ended Mar. 31, 2021								Three Months Ended September 30, 2021							Three Months Ended June 30, 2021
		June 30, 2021		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter	Mar. 31, 2021		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter		Sept. 30, 2021		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter	June 30, 2021		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter

Funds purchased	Funds purchased	185,315		591,112		0.40	%	395,416	236,151		874,576		0.39	%	542,465	Funds purchased	253,557		377,436		0.57	%	326,176	185,315		591,112		0.40	%	395,416
Repurchase agreements	Repurchase agreements	544,868		1,199,378		0.05	%	544,868	559,010		1,955,801		0.11	%	1,073,237	Repurchase agreements	589,716		1,071,364		0.07	%	611,488	544,868		1,199,378		0.05	%	544,868
Other borrowings:	Other borrowings:															Other borrowings:
Federal Home Loan Bank advances	Federal Home Loan Bank advances	500,000		2,138,462		0.27	%	2,600,000	—		1,836,667		0.29	%	1,400,000	Federal Home Loan Bank advances	—		1,908,152		0.26	%	700,000	500,000		2,138,462		0.27	%	2,600,000
GNMA repurchase liability	GNMA repurchase liability	7,625		11,306		3.73	%	10,895	14,044		20,979		4.08	%	23,856	GNMA repurchase liability	6,495		7,286		4.14	%	7,618	7,625		11,306		3.73	%	10,895

Paycheck protection program liquidity facility	Paycheck protection program liquidity facility	1,010,560		1,430,522		0.35	%	1,529,788	1,662,598		1,505,930		0.35	%	1,662,598	Paycheck protection program liquidity facility	—		599,747		0.34	%	672,850	1,010,560		1,430,522		0.35	%	1,529,788
Other	Other	28,046		28,079		5.53	%	28,757	31,875		28,771		5.59	%	31,875	Other	30,931		30,898		5.33	%	31,322	28,046		28,079		5.53	%	28,757
Total other borrowings	Total other borrowings	1,546,231		3,608,369		0.34	%		1,708,517		3,392,347		0.39	%		Total other borrowings	37,426		2,546,083		0.37	%		1,546,231		3,608,369		0.34	%
Subordinated debentures1	Subordinated debentures1	276,043		276,034		4.87	%	276,043	276,024		276,015		4.92	%	276,024	Subordinated debentures1	131,220		214,654		4.63	%	276,049	276,043		276,034		4.87	%	276,043

Total other borrowed funds and subordinated debentures	Total other borrowed funds and subordinated debentures	$	2,552,457	$	5,674,893	0.50	%		$	2,779,702	$	6,498,739	0.50	%		Total other borrowed funds and subordinated debentures	$	1,011,919	$	4,209,537	0.53	%		$	2,552,457	$	5,674,893	0.50	%

1 Parent Company only.

BOKF, NA also has a liability related to the repurchase of certain delinquent residential mortgage loans previously sold in GNMA mortgage pools. Interest is payable monthly at rates contractually due to investors.

Parent Company

At ~~June~~September 30, 2021, cash and interest-bearing cash and cash equivalents held by the parent company totaled ~~$168~~$159 million. The primary sources of liquidity for BOK Financial are cash on hand and dividends from BOKF, NA. Dividends from the bank are limited by various banking regulations to net profits, as defined, for the year plus retained profits for the two preceding years. Dividends are further restricted by minimum capital requirements. At ~~June~~September 30, 2021, based upon the most restrictive limitations as well as management's internal capital policy, BOKF, NA could declare up to ~~$504~~$401 million of dividends without regulatory approval. Dividend constraints may be alleviated through increases in retained earnings, capital issuances or changes in risk weighted assets. Future losses or increases in required regulatory capital at the bank could affect its ability to pay dividends to the parent company.

Our equity capital at ~~June~~September 30, 2021 was $5.4 billion, a ~~$92~~$42 million increase ~~compared to March 31,~~over June 30, 2021. Net income less cash dividends paid increased equity ~~$131~~$153 million during the ~~second~~third quarter of 2021. Changes in interest rates resulted in a ~~$5.4~~$58 million ~~increase~~decrease in accumulated other comprehensive gain compared to ~~March 31,~~June 30, 2021. We also repurchased ~~$44~~$41 million of common stock during the ~~second~~third quarter of 2021. Capital is managed to maximize long-term value to the shareholders. Factors considered in managing capital include projections of future earnings including expected benefits from lower federal income tax rates, asset growth and acquisition strategies, and regulatory and debt covenant requirements. Capital management may include subordinated debt or perpetual preferred stock issuance, share repurchase and stock and cash dividends.

On April 30, 2019, the board of directors authorized the Company to purchase up to five million common shares, subject to market conditions, securities law and other regulatory compliance limitations. As of ~~June~~September 30, 2021, ~~2,726,807~~3,204,948 shares have been repurchased under this authorization. The Company repurchased ~~492,994~~478,141 shares of common stock at an average price of ~~$88.84~~$85.00 a share in the ~~second~~third quarter of 2021. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

- 3736 -

BOK Financial and BOKF, NA are subject to various capital requirements administered by federal agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that could have a material impact on operations. These capital requirements include quantitative measures of assets, liabilities and off-balance sheet items. The capital standards are also subject to qualitative judgments by the regulators.

A summary of minimum capital requirements, including capital conservation buffer follows in Table 22. A bank which falls below these levels, including the capital conservation buffer, would be subject to regulatory restrictions on capital distributions (including but not limited to dividends and share repurchases) and executive bonus payments.

In March 2020, in response to the impact on the financial markets by the COVID-19 pandemic, the banking agencies issued an interim final rule permitting banking organizations that implement CECL the option to delay for two years an estimate of the CECL methodology's effect on regulatory capital, followed by a three-year transition period. The estimate includes the implementation date adjustment as of January 1, 2020 plus an estimate of the impact of the change for a two year period following implementation of CECL. We have elected to delay the regulatory capital impact of the transition in accordance with the interim final rule. Deferral of the impact of CECL added 1920 basis points to the Company's Common equity Tier 1 capital at ~~June~~September 30, 2021.

The capital ratios for BOK Financial on a consolidated basis are presented in Table 22.

Table 22 -- Capital Ratios


		Minimum Capital Requirement		Capital Conservation Buffer		Minimum Capital Requirement Including Capital Conservation Buffer		June 30, 2021		Mar. 31, 2021		June 30, 2020			Minimum Capital Requirement		Capital Conservation Buffer		Minimum Capital Requirement Including Capital Conservation Buffer		Sept. 30, 2021		June 30, 2021		Sept. 30, 2020
Risk-based capital:	Risk-based capital:													Risk-based capital:
Common equity Tier 1	Common equity Tier 1	4.50	%	2.50	%	7.00	%	11.95	%	12.14	%	11.44	%	Common equity Tier 1	4.50	%	2.50	%	7.00	%	12.26	%	11.95	%	12.07	%
Tier 1 capital	Tier 1 capital	6.00	%	2.50	%	8.50	%	12.01	%	12.21	%	11.44	%	Tier 1 capital	6.00	%	2.50	%	8.50	%	12.29	%	12.01	%	12.07	%
Total capital	Total capital	8.00	%	2.50	%	10.50	%	13.61	%	13.98	%	13.43	%	Total capital	8.00	%	2.50	%	10.50	%	13.38	%	13.61	%	14.05	%
Tier 1 Leverage	Tier 1 Leverage	4.00	%	N/A		4.00	%	8.58	%	8.42	%	7.74	%	Tier 1 Leverage	4.00	%	N/A		4.00	%	8.77	%	8.58	%	8.39	%

Average total equity to average assets	Average total equity to average assets							10.62	%	10.48	%	10.19	%	Average total equity to average assets							11.00	%	10.62	%	10.55	%
Tangible common equity ratio	Tangible common equity ratio							9.09	%	8.82	%	8.79	%	Tangible common equity ratio							9.28	%	9.09	%	9.02	%

Capital resources of financial institutions are also regularly measured by the tangible common shareholders’ equity ratio. Tangible common shareholders’ equity is shareholders’ equity as defined by generally accepted accounting principles in the United States of America (“GAAP”) less intangible assets and equity which does not benefit common shareholders. Equity that does not benefit common shareholders includes preferred equity. This non-GAAP measure is a valuable indicator of a financial institution’s capital strength since it eliminates intangible assets from shareholders’ equity and retains the effect of unrealized losses on securities and other components of accumulated other comprehensive income in shareholders’ equity.

Table 23 provides a reconciliation of the non-GAAP measures with financial measures defined by GAAP.

- 3837 -

Table 23 -- Non-GAAP Measure

(Dollars in thousands)


		June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020			June 30, 2020				Sept. 30, 2021			June 30, 2021			Mar. 31, 2021			Dec. 31, 2020			Sept. 30, 2020
Tangible common equity ratio:	Tangible common equity ratio:																Tangible common equity ratio:
Total shareholders' equity	Total shareholders' equity	$	5,332,977		$	5,239,462		$	5,266,266		$	5,218,787		$	5,096,995		Total shareholders' equity	$	5,388,973		$	5,332,977		$	5,239,462		$	5,266,266		$	5,218,787
Less: Goodwill and intangible assets, net	Less: Goodwill and intangible assets, net	1,153,785			1,158,676			1,161,527			1,166,615			1,171,686			Less: Goodwill and intangible assets, net	1,140,935			1,153,785			1,158,676			1,161,527			1,166,615
Tangible common equity	Tangible common equity	4,179,192			4,080,786			4,104,739			4,052,172			3,925,309			Tangible common equity	4,248,038			4,179,192			4,080,786			4,104,739			4,052,172
Total assets	Total assets	47,154,375			47,442,513			46,671,088			46,067,224			45,819,874			Total assets	46,923,409			47,154,375			47,442,513			46,671,088			46,067,224
Less: Goodwill and intangible assets, net	Less: Goodwill and intangible assets, net	1,153,785			1,158,676			1,161,527			1,166,615			1,171,686			Less: Goodwill and intangible assets, net	1,140,935			1,153,785			1,158,676			1,161,527			1,166,615
Tangible assets	Tangible assets	$	46,000,590		$	46,283,837		$	45,509,561		$	44,900,609		$	44,648,188		Tangible assets	$	45,782,474		$	46,000,590		$	46,283,837		$	45,509,561		$	44,900,609
Tangible common equity ratio	Tangible common equity ratio	9.09		%	8.82		%	9.02		%	9.02		%	8.79		%	Tangible common equity ratio	9.28		%	9.09		%	8.82		%	9.02		%	9.02		%

Pre-provision net revenue:	Pre-provision net revenue:																Pre-provision net revenue:
Net income before taxes	Net income before taxes	$	215,603		$	186,690		$	199,847		$	204,644		$	80,089		Net income before taxes	$	241,782		$	215,603		$	186,690		$	199,847		$	204,644
Provision for expected credit losses	Provision for expected credit losses	(35,000)			(25,000)			(6,500)			—			135,321			Provision for expected credit losses	(23,000)			(35,000)			(25,000)			(6,500)			—
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	686			(1,752)			485			58			(407)			Net income (loss) attributable to non-controlling interests	(601)			686			(1,752)			485			58
Pre-provision net revenue	Pre-provision net revenue	$	179,917		$	163,442		$	192,862		$	204,586		$	215,817		Pre-provision net revenue	$	219,383		$	179,917		$	163,442		$	192,862		$	204,586

Pre-provision net revenue is a measure of revenue less expenses, and is calculated before provision for credit losses and income tax expense. This financial measure is frequently used by investors and analysts to enable them to assess a company's ability to generate earnings to cover credit losses through a credit cycle. It also provides an additional basis for comparing the results of operations between periods by isolating the impact of the provision for credit losses, which can vary significantly between periods.

Off-Balance Sheet Arrangements

See Note 4 to the Consolidated Financial Statements for a discussion of the Company’s significant off-balance sheet commitments.

Market Risk

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices or equity prices. Financial instruments that are subject to market risk can be classified either as held for trading or held for purposes other than trading. Market risk excludes changes in fair value due to the credit of the individual issuers of financial instruments.

BOK Financial is subject to market risk primarily through the effect of changes in interest rates on both its assets held for purposes other than trading and trading assets. The effects of other changes, such as foreign exchange rates, commodity prices or equity prices do not pose significant market risk to BOK Financial. BOK Financial has no material investments in assets that are affected by changes in foreign exchange rates or equity prices. Energy and agricultural product derivative contracts, which are affected by changes in commodity prices, are matched against offsetting contracts as previously discussed.

The Asset/Liability Committee is responsible for managing market risk in accordance with policy limits established by the Board of Directors. The Committee monitors projected variation in net interest revenue, net income and economic value of equity due to specified changes in interest rates. These limits also set maximum levels for short-term borrowings, short-term assets, public funds and brokered deposits and establish minimum levels for un-pledged assets, among other things. Further, the Board approved market risk limits for fixed income trading, mortgage pipeline and mortgage servicing assets inclusive of economic hedge benefits. Exposure is measured daily and compliance is reviewed monthly. Deviations from the Board approved limits, which periodically occur throughout the reporting period, may require management to develop and execute plans to reduce exposure. These plans are subject to escalation to and approval by the Board.

The simulations used to manage market risk are based on numerous assumptions regarding the effects of changes in interest rates on the timing and extent of repricing characteristics, future cash flows and customer behavior. These assumptions are inherently uncertain and, as a result, models cannot precisely estimate or precisely predict the impact of higher or lower interest

- 3938 -

rates. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes, market conditions and management strategies, among other factors.

Interest Rate Risk – Other than Trading

As previously noted in the Net Interest Revenue section of this report, management has implemented strategies to manage the Company’s balance sheet to have relatively limited exposure to changes in interest rates over a twelve-month period. The effectiveness of these strategies in managing the overall interest rate risk is evaluated through the use of an asset/liability model. BOK Financial performs a sensitivity analysis to identify more dynamic interest rate risk exposures, including embedded option positions, on net interest revenue. A simulation model is used to estimate the effect of changes in interest rates on our performance across multiple interest rate scenarios. Our current internal policy limit for net interest revenue variation due to a 200 basis point parallel change in market interest rates over twelve months is a maximum decline of 5 percent. The results of a decrease in interest rates in the current low-rate environment are not meaningful. Management also reviews alternative rate changes and time periods.

The Company’s primary interest rate exposures include the Federal Funds rate, which affects short-term borrowings, and the prime lending rate and LIBOR, which are the basis for much of the variable rate loan pricing. Additionally, residential mortgage rates directly affect the prepayment speeds for residential mortgage-backed securities and mortgage servicing rights. Derivative financial instruments and other financial instruments used for purposes other than trading are included in this simulation. In addition, the impact on the level and composition of demand deposit accounts and other core deposit balances resulting from a significant increase in short-term market interest rates and the overall interest rate environment is likely to be material. The simulation incorporates assumptions regarding the effects of such changes based on a combination of historical analysis and expected behavior. The impact of planned growth and new business activities is factored into the simulation model.

The interest rate sensitivity in Table 24 indicate management’s estimation of the impact of rate changes on net interest revenue. Should deposit costs be 10 percent more sensitive to changes in rates, the variation in net interest revenue over the next twelve months would be 5.97 percent, or $67.2 million for the 200 basis point increase scenario. Alternatively, should deposit funding costs be 10 percent less sensitive to changes in rates, the variation in net interest revenue over the next twelve months would be 7.37 percent, or $82.8 million for the 200 basis point increase scenario.

Table 24 -- Interest Rate Sensitivity

(Dollars in thousands)

200 bp Increase
100 bp Decrease1
June 30, June 30,
2021 2020 2021 2020
Anticipated impact over the next twelve months on net interest revenue $ 57,142 $ 35,746 N/A N/A
5.15 % 3.47 % N/A N/A

1 ~~The results of a decrease in the current low-rate environment are not meaningful.~~


	200 bp Increase						100 bp Increase
	September 30,						September 30,
	2021			2020			2021			2020
Anticipated impact over the next twelve months on net interest revenue	$	74,998		$	27,973		$	47,528		$	24,941
	6.67		%	2.69		%	4.23		%	2.40		%
Anticipated impact over months twelve through twenty-four	$	168,932		$	114,156		$	118,942		$	87,910
	15.01		%	11.15		%	10.57		%	8.90		%

BOK Financial is also subjected to market risk through changes in the fair value of mortgage servicing rights. Changes in the fair value of mortgage servicing rights are highly dependent on changes in primary mortgage rates offered to borrowers, intermediate-term interest rates that affect the value of custodial funds, and assumptions about servicing revenues, servicing costs and discount rates. As primary mortgage rates increase, prepayment speeds slow and the value of our mortgage servicing rights increases. As primary mortgage rates fall, prepayment speeds increase and the value of our mortgage servicing rights decreases.

We maintain a portfolio of financial instruments, which may include debt securities issued by the U.S. government or its agencies and interest rate derivative contracts, held as an economic hedge of the changes in the fair value of our mortgage servicing rights. Composition of this portfolio will change based on our assessment of market risk. Changes in the fair value of residential mortgage-backed securities are highly dependent on changes in secondary mortgage rates required by investors, and interest rate derivative contracts are highly dependent on changes in other market interest rates. While primary and secondary mortgage rates generally move in the same direction, the spread between them may widen and narrow due to market conditions and government intervention. Changes in the forward-looking spread between the primary and secondary rates can cause significant earnings volatility.

- 39 -

Management performs a stress test to measure market risk due to changes in interest rates inherent in its MSR portfolio and hedges. The stress test shocks applicable interest rates up and down 50 basis points and calculates an estimated change in fair value, net of economic hedging activity, that may result. The Board has approved a $20 million market risk limit for mortgage servicing rights, net of economic hedges.

~~- 40 -~~

Table 25 -- MSR Asset and Hedge Sensitivity Analysis

(Dollars in thousands)


		June 30,									September 30,
		2021				2020					2021				2020
		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp			Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp
MSR Asset	MSR Asset	$	31,064	$	(31,446)	$	28,466	$	(13,198)	MSR Asset	$	29,105	$	(35,405)	$	26,917	$	(11,991)
MSR Hedge	MSR Hedge	(33,420)		30,976		(25,186)		23,542		MSR Hedge	(36,540)		33,489		(18,361)		17,534
Net Exposure	Net Exposure	(2,356)		(470)		3,280		10,344		Net Exposure	(7,435)		(1,916)		8,556		5,543

Trading Activities

The Company bears market risk by originating residential mortgages held for sale ("RMHFS"). RMHFS are generally outstanding for 60 to 90 days, which represents the typical period from commitment to originate a loan to sale of the closed loan to an investor. Primary mortgage interest rate changes during this period affect the value of RMHFS commitments and loans. We use forward sale contracts to mitigate market risk on all closed mortgage loans held for sale and on an estimate of mortgage loan commitments that are expected to result in closed loans.

A variety of methods are used to monitor market risk of mortgage origination activities. These methods include daily marking of all positions to market value, independent verification of inventory pricing, and revenue sensitivity limits.

Management performs a stress test to measure market risk due to changes in interest rates inherent in the mortgage production pipeline. The stress test shocks applicable interest rates up and down 50 basis points and calculates an estimated change in fair value, net of economic hedging activity that may result. The Board has approved a $7 million market risk limit for the mortgage production pipeline, net of forward sale contracts.

Table 26 -- Mortgage Pipeline Sensitivity Analysis

(Dollars in thousands)


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020					2021				2020				2021				2020
		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp			Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp
Average1	Average1	$	(467)	$	(485)	$	(393)	$	(49)	$	(555)	$	(547)	$	(304)	$	(107)	Average1	$	(354)	$	(403)	$	(407)	$	(696)	$	(487)	$	(498)	$	(339)	$	(308)
Low2	Low2	(231)		13		403		723		(17)		13		582		998		Low2	(81)		(216)		344		314		(17)		13		582		998
High3	High3	(980)		(709)		(1,310)		(823)		(1,244)		(1,097)		(1,344)		(1,483)		High3	(603)		(676)		(1,044)		(1,160)		(1,244)		(1,097)		(1,344)		(1,483)
Period End	Period End	(291)		(408)		(195)		10		(291)		(408)		(195)		10		Period End	(393)		(449)		(543)		(705)		(393)		(449)		(543)		(705)

1 Average represents the simple average of each daily value observed during the reporting period.

2 Low represents least risk of loss in fair value measured as the smallest negative value or the largest positive value observed daily during the reporting period.

3 High represents the greatest risk of loss in fair value measured as the largest negative value or the smallest positive value observed daily during the reporting period.

BOK Financial engages in trading activities both as an intermediary for customers and for its own account. As an intermediary, we take positions in securities, generally U.S. government agency residential mortgage-backed securities, government agency securities and municipal bonds. These securities are purchased for resale to customers, which include individuals, corporations, foundations and financial institutions. On a limited basis, we may also take trading positions in U.S. Treasury securities, residential mortgage-backed securities, and municipal bonds to enhance returns on securities portfolios. Both of these activities involve interest rate, liquidity and price risk. BOK Financial has an insignificant exposure to foreign exchange risk and does not take positions in commodity derivatives.

A variety of methods are used to monitor the interest rate risk of trading activities. These methods include daily marking of all positions to market value, independent verification of inventory pricing, and position limits for each trading activity. Economic hedges in either the futures or cash markets may be used to reduce the risk associated with some trading programs.

- 40 -

Management performs a stress test to measure market risk from changes in interest rates on its trading portfolio. The stress test shocks applicable interest rates up and down 50 basis points and calculates an estimated change in fair value, net of economic hedging activity that may result. The Board has approved an $11 million market risk limit for the trading portfolio, net of economic hedges.

~~- 41 -~~

Table 27 -- Trading Sensitivity Analysis

(Dollars in thousands)


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
		2021				2020				2021				2020					2021				2020				2021				2020
		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp			Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp		Up 50 bp		Down 50 bp
Average1	Average1	$	(803)	$	3,901	$	(2,161)	$	3,314	$	(1,692)	$	3,747	$	(3,371)	$	5,266	Average1	$	(1,133)	$	4,444	$	(178)	$	1,461	$	(1,503)	$	3,983	$	(2,280)	$	3,965
Low2	Low2	4,984		13,323		2,919		14,163		5,818		13,323		2,919		15,309		Low2	7,271		10,424		7,893		8,762		7,271		13,323		7,893		15,309
High3	High3	(9,345)		(3,817)		(12,490)		(2,049)		(9,345)		(4,618)		(12,490)		(2,049)		High3	(6,701)		(5,392)		(7,371)		(4,058)		(9,345)		(5,392)		(12,490)		(4,058)
Period End	Period End	3,941		(283)		704		463		3,941		(283)		704		463		Period End	(1,288)		2,423		(5,837)		5,698		(1,288)		2,423		(5,837)		5,698

1 Average represents the simple average of each daily value observed during the reporting period.

2 Low represents least risk of loss in fair value measured as the smallest negative value or the largest positive value observed daily during the reporting period.

3 High represents the greatest risk of loss in fair value measured as the largest negative value or the smallest positive value observed daily during the reporting period.

We have a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. In 2017, the U.K. Financial Conduct Authority announced that it would no longer persuade or compel banks to submit to LIBOR after 2021. U.S. regulatory authorities have voiced similar support for phasing out LIBOR. The Federal Reserve Bank of New York’s Alternative Reference Rate Committee has recommended the Secured Overnight Financing Rate (“SOFR”) as an alternative for LIBOR. However, for two key reasons, SOFR is a secured rate while LIBOR is an unsecured rate and SOFR is an overnight rate while LIBOR is published for different maturities, SOFR is not the economic equivalent of LIBOR.

On March 5, 2021, the Financial Conduct Authority officially confirmed the adoption of recommendations made in November of 2020 by the ICE Benchmark Administration (IBA), the FCA-regulated and authorized administrator of LIBOR. At that time, the IBA had announced its intention to cease USD LIBOR for one-week and two-month tenors at the end of 2021, but to extend the anticipated cessation date for the remaining USD LIBOR tenors to the end of June 2023. Regulators were supportive and issued a joint statement that communicated their expectation for banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021.

Management has established a LIBOR Transition Working Group (the “Group”) whose purpose is to guide the overall transition process for the Company. The Group is an internal, cross-functional team with representatives from all business lines, support and control functions and legal counsel. Key loan provisions have been modified to ensure that new and renewed loans include appropriate LIBOR fallback language to ensure the smoothest possible transition from LIBOR to the new benchmark when such transition occurs. All direct exposures resulting from existing financial contracts that mature after planned cessation dates have been inventoried and are monitored on an ongoing basis. Remediation of these exposures will be consistent with industry timing. The Group has also inventoried indirect LIBOR exposures within the Company's systems, models and processes, and remediation of critical items is nearing completion.

Consistent with the regulatory guidance, the Company plans and is well positioned to cease originating loans indexed to LIBOR ~~later this year, and in any event,~~ no later than December 31, 2021. There are currently several viable alternative reference rates that we ~~are evaluating~~plan to ~~replace LIBOR.~~make available to serve our customers' needs, but the Company expects its primary LIBOR replacement index to be SOFR. The Company’s LIBOR Transition Working Group continues to monitor the market and adapt the Company’s approach based on market conditions. We do not currently expect there to be a material financial impact to the Company or our customers regardless of which index or indices the Company selects to replace LIBOR later this year.

Controls and Procedures

As required by Rule 13a-15(b), BOK Financial’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by their report, of the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report. As required by Rule 13a-15(d), BOK Financial’s management, including the Chief Executive

- 41 -

Officer and Chief Financial Officer, also conducted an evaluation of the Company’s internal controls over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

~~- 42 -~~

Forward-Looking Statements

This report contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about BOK Financial Corporation, the financial services industry, the economy generally and the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and others, on our business, financial condition and results of operations. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” “will,” “intends,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the provision and allowance for credit losses, allowance for uncertain tax positions, accruals for loss contingencies and valuation of mortgage servicing rights involve judgments as to expected events and are inherently forward-looking statements. Assessments that acquisitions and growth endeavors will be profitable are necessary statements of belief as to the outcome of future events based in part on information provided by others which BOK Financial has not independently verified. These various forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions which are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expected, implied or forecasted in such forward-looking statements. Internal and external factors that might cause such a difference include, but are not limited to changes in government, consumer or business responses to, and ability to treat or prevent further outbreak of, the COVID-19 pandemic, changes in commodity prices, interest rates and interest rate relationships, inflation, demand for products and services, the degree of competition by traditional and nontraditional competitors, changes in banking regulations, tax laws, prices, levies and assessments, the impact of technological advances, and trends in customer behavior as well as their ability to repay loans. BOK Financial and its affiliates undertake no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

In this report we may sometimes use non-GAAP financial measures. Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. If applicable, we provide GAAP reconciliations for non-GAAP financial measures.

- 4342 -


Consolidated Statements of Earnings (Unaudited)	Consolidated Statements of Earnings (Unaudited)									Consolidated Statements of Earnings (Unaudited)
(In thousands, except share and per share data)	(In thousands, except share and per share data)	Three Months Ended				Six Months Ended				(In thousands, except share and per share data)	Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
Interest revenue	Interest revenue	2021		2020		2021		2020		Interest revenue	2021		2020		2021		2020
Loans	Loans	$	193,841	$	215,438	$	391,415	$	458,656	Loans	$	191,206	$	215,977	$	582,621	$	674,633
Residential mortgage loans held for sale	Residential mortgage loans held for sale	1,569		2,140		2,949		3,263		Residential mortgage loans held for sale	1,274		1,585		4,223		4,848
Trading securities	Trading securities	36,655		11,407		72,577		23,167		Trading securities	38,941		8,723		111,518		31,890
Investment securities	Investment securities	2,608		3,000		5,334		6,121		Investment securities	2,580		2,939		7,914		9,060
Available for sale securities	Available for sale securities	58,909		68,297		117,517		138,017		Available for sale securities	57,310		62,369		174,827		200,386
Fair value option securities	Fair value option securities	402		4,110		898		15,818		Fair value option securities	342		1,986		1,240		17,804
Restricted equity securities	Restricted equity securities	1,751		1,880		3,110		7,774		Restricted equity securities	1,565		913		4,675		8,687
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	158		112		332		2,505		Interest-bearing cash and cash equivalents	245		167		577		2,672
Total interest revenue	Total interest revenue	295,893		306,384		594,132		655,321		Total interest revenue	293,463		294,659		887,595		949,980
Interest expense	Interest expense									Interest expense
Deposits	Deposits	8,425		17,745		18,275		63,904		Deposits	7,665		14,658		25,940		78,562
Borrowed funds	Borrowed funds	3,806		6,996		8,428		44,781		Borrowed funds	3,066		4,856		11,494		49,637
Subordinated debentures	Subordinated debentures	3,353		3,539		6,700		7,172		Subordinated debentures	2,505		3,395		9,205		10,567
Total interest expense	Total interest expense	15,584		28,280		33,403		115,857		Total interest expense	13,236		22,909		46,639		138,766
Net interest revenue	Net interest revenue	280,309		278,104		560,729		539,464		Net interest revenue	280,227		271,750		840,956		811,214
Provision for credit losses	Provision for credit losses	(35,000)		135,321		(60,000)		229,092		Provision for credit losses	(23,000)		—		(83,000)		229,092
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	315,309		142,783		620,729		310,372		Net interest revenue after provision for credit losses	303,227		271,750		923,956		582,122
Other operating revenue	Other operating revenue									Other operating revenue
Brokerage and trading revenue	Brokerage and trading revenue	29,408		62,022		50,190		112,801		Brokerage and trading revenue	47,930		69,526		98,120		182,327
Transaction card revenue	Transaction card revenue	24,923		22,940		47,353		44,821		Transaction card revenue	24,632		23,465		71,985		68,286
Fiduciary and asset management revenue	Fiduciary and asset management revenue	44,832		41,257		86,154		85,715		Fiduciary and asset management revenue	45,248		39,931		131,402		125,646
Deposit service charges and fees	Deposit service charges and fees	25,861		22,046		50,070		48,176		Deposit service charges and fees	27,429		24,286		77,499		72,462
Mortgage banking revenue	Mortgage banking revenue	21,219		53,936		58,332		91,103		Mortgage banking revenue	26,286		51,959		84,618		143,062
Other revenue	Other revenue	23,172		11,479		39,468		23,788		Other revenue	18,896		13,698		58,364		37,486
Total fees and commissions	Total fees and commissions	169,415		213,680		331,567		406,404		Total fees and commissions	190,421		222,865		521,988		629,269

Other gains (losses), net	Other gains (losses), net	16,449		7,347		26,570		(3,391)		Other gains (losses), net	31,091		2,044		57,661		(1,347)
Gain (loss) on derivatives, net	Gain (loss) on derivatives, net	18,820		21,885		(8,830)		40,305		Gain (loss) on derivatives, net	(5,760)		2,354		(14,590)		42,659
Gain (loss) on fair value option securities, net	Gain (loss) on fair value option securities, net	(1,627)		(14,459)		(3,537)		53,934		Gain (loss) on fair value option securities, net	(120)		(754)		(3,657)		53,180
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	(13,041)		(761)		20,833		(89,241)		Change in fair value of mortgage servicing rights	12,945		3,441		33,778		(85,800)
Gain on available for sale securities, net	Gain on available for sale securities, net	1,430		5,580		1,897		5,583		Gain on available for sale securities, net	1,255		(12)		3,152		5,571

Total other operating revenue	Total other operating revenue	191,446		233,272		368,500		413,594		Total other operating revenue	229,832		229,938		598,332		643,532
Other operating expense	Other operating expense									Other operating expense
Personnel	Personnel	172,035		176,235		345,045		332,416		Personnel	175,863		179,860		520,908		512,276
Business promotion	Business promotion	2,744		1,935		4,898		8,150		Business promotion	4,939		2,633		9,837		10,783
Charitable contributions to BOKF Foundation	Charitable contributions to BOKF Foundation	0		3,000		4,000		3,000		Charitable contributions to BOKF Foundation	—		—		4,000		3,000
Professional fees and services	Professional fees and services	12,361		12,161		24,341		25,109		Professional fees and services	12,436		14,074		36,777		39,183
Net occupancy and equipment	Net occupancy and equipment	26,633		30,675		53,295		56,736		Net occupancy and equipment	28,395		28,111		81,690		84,847
Insurance	Insurance	3,660		5,156		8,280		10,136		Insurance	3,712		5,848		11,992		15,984
Data processing and communications	Data processing and communications	36,418		32,942		73,885		65,685		Data processing and communications	38,371		34,751		112,256		100,436
Printing, postage and supplies	Printing, postage and supplies	4,285		3,502		7,725		7,774		Printing, postage and supplies	3,558		3,482		11,283		11,256
Amortization of intangible assets	Amortization of intangible assets	4,578		5,190		9,385		10,284		Amortization of intangible assets	4,488		5,071		13,873		15,355
Mortgage banking costs	Mortgage banking costs	11,126		15,598		25,069		26,143		Mortgage banking costs	8,962		15,803		34,031		41,946
Other expense	Other expense	17,312		9,572		31,013		19,160		Other expense	10,553		7,411		41,566		26,571
Total other operating expense	Total other operating expense	291,152		295,966		586,936		564,593		Total other operating expense	291,277		297,044		878,213		861,637
Net income before taxes	Net income before taxes	215,603		80,089		402,293		159,373		Net income before taxes	241,782		204,644		644,075		364,017
Federal and state income taxes	Federal and state income taxes	48,496		15,803		90,878		33,103		Federal and state income taxes	54,061		50,552		144,939		83,655
Net income	Net income	167,107		64,286		311,415		126,270		Net income	187,721		154,092		499,136		280,362
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	686		(407)		(1,066)		(502)		Net income (loss) attributable to non-controlling interests	(601)		58		(1,667)		(444)
Net income attributable to BOK Financial Corporation shareholders	Net income attributable to BOK Financial Corporation shareholders	$	166,421	$	64,693	$	312,481	$	126,772	Net income attributable to BOK Financial Corporation shareholders	$	188,322	$	154,034	$	500,803	$	280,806
Earnings per share:	Earnings per share:									Earnings per share:
Basic	Basic	$	2.40	$	0.92	$	4.50	$	1.80	Basic	$	2.74	$	2.19	$	7.23	$	3.99
Diluted	Diluted	$	2.40	$	0.92	$	4.50	$	1.80	Diluted	$	2.74	$	2.19	$	7.23	$	3.99
Average shares used in computation:	Average shares used in computation:									Average shares used in computation:
Basic	Basic	68,815,666		69,876,043		68,975,743		69,999,865		Basic	68,359,125		69,877,866		68,768,044		69,958,944
Diluted	Diluted	68,817,442		69,877,467		68,978,798		70,003,817		Diluted	68,360,871		69,879,290		68,770,663		69,962,053
Dividends declared per share	Dividends declared per share	$	0.52	$	0.51	$	1.04	$	1.02	Dividends declared per share	$	0.52	$	0.51	$	1.56	$	1.53

See accompanying notes to consolidated financial statements.

- 43 -


Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands, except share and per share data)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income	$	187,721	$	154,092	$	499,136	$	280,362
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss)	(74,525)		(6,783)		(216,176)		347,985
Reclassification adjustments included in earnings:


Loss (gain) on available for sale securities, net	(1,255)		12		(3,152)		(5,571)
Other comprehensive income (loss) before income taxes	(75,780)		(6,771)		(219,328)		342,414
Federal and state income taxes	(18,184)		(1,625)		(52,632)		82,167
Other comprehensive income (loss), net of income taxes	(57,596)		(5,146)		(166,696)		260,247
Comprehensive income	130,125		148,946		332,440		540,609
Comprehensive income (loss) attributable to non-controlling interests	(601)		58		(1,667)		(444)
Comprehensive income attributable to BOK Financial Corp. shareholders	$	130,726	$	148,888	$	334,107	$	541,053

See accompanying notes to consolidated financial statements.

- 44 -

Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Net income $ 167,107 $ 64,286 $ 311,415 $ 126,270
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss) 8,480 56,922 (141,651) 354,765
Reclassification adjustments included in earnings:
Gain on available for sale securities, net (1,430) (5,580) (1,897) (5,583)
Other comprehensive income (loss) before income taxes 7,050 51,342 (143,548) 349,182
Federal and state income taxes 1,691 12,318 (34,448) 83,789
Other comprehensive income (loss), net of income taxes 5,359 39,024 (109,100) 265,393
Comprehensive income 172,466 103,310 202,315 391,663
Comprehensive income (loss) attributable to non-controlling interests 686 (407) (1,066) (502)
Comprehensive income attributable to BOK Financial Corp. shareholders $ 171,780 $ 103,717 $ 203,381 $ 392,165
Consolidated Balance Sheets

(In thousands, except share data)


	Sept. 30, 2021		Dec. 31, 2020
	(Unaudited)		(Footnote 1)
Assets
Cash and due from banks	$	729,285	$	798,757
Interest-bearing cash and cash equivalents	1,162,477		381,816
Trading securities	5,554,040		4,707,975
Investment securities, net of allowance (fair value: September 30, 2021 – $238,489; December 31, 2020 – $272,431)	215,592		244,843
Available for sale securities	13,342,113		13,050,665
Fair value option securities	51,019		114,982
Restricted equity securities	77,542		171,391
Residential mortgage loans held for sale	176,813		252,316
Loans	20,347,936		23,007,520
Allowance for loan losses	(276,680)		(388,640)
Loans, net of allowance	20,071,256		22,618,880
Premises and equipment, net	558,126		551,308
Receivables	171,505		245,880
Goodwill	1,044,749		1,048,091
Intangible assets, net	96,186		113,436
Mortgage servicing rights	133,308		101,172
Real estate and other repossessed assets, net of allowance (September 30, 2021 – $6,105; December 31, 2020 – $15,060)	28,770		90,526
Derivative contracts, net	1,901,136		810,688
Cash surrender value of bank-owned life insurance	403,369		398,758
Receivable on unsettled securities sales	215,755		62,386
Other assets	990,368		907,218
Total assets	$	46,923,409	$	46,671,088

Liabilities and Equity
Liabilities:
Noninterest-bearing demand deposits	$	14,090,229	$	12,266,338
Interest-bearing deposits:
Transaction	21,753,110		21,158,422
Savings	900,497		751,992
Time	1,780,715		1,967,128
Total deposits	38,524,551		36,143,880
Funds purchased and repurchase agreements	843,273		1,662,386
Other borrowings	37,426		1,882,970
Subordinated debentures	131,220		276,005
Accrued interest, taxes and expense	220,266		323,667
Derivative contracts, net	739,641		405,779
Due on unsettled securities purchases	614,598		257,627
Other liabilities	415,986		427,213
Total liabilities	41,526,961		41,379,527
Shareholders' equity:
Common stock ($0.00006 par value; 2,500,000,000 shares authorized; shares issued and outstanding: September 30, 2021 – 76,254,190; December 31, 2020 – 75,995,205)	5		5
Capital surplus	1,374,688		1,368,062
Retained earnings	4,366,779		3,973,675
Treasury stock (shares at cost: September 30, 2021 – 7,657,426; December 31, 2020 – 6,357,605)	(521,671)		(411,344)
Accumulated other comprehensive gain	169,172		335,868
Total shareholders’ equity	5,388,973		5,266,266
Non-controlling interests	7,475		25,295
Total equity	5,396,448		5,291,561
Total liabilities and equity	$	46,923,409	$	46,671,088

See accompanying notes to consolidated financial statements.

- 45 -

Consolidated ~~Balance Sheets~~Statements of Changes in Equity (Unaudited)

(In ~~thousands, except share data)~~thousands)

June 30, 2021 Dec. 31, 2020
(Unaudited) (Footnote 1)
Assets
Cash and due from banks $ 678,998 $ 798,757
Interest-bearing cash and cash equivalents 580,457 381,816
Trading securities 5,699,070 4,707,975
Investment securities, net of allowance (fair value: June 30, 2021 – $246,034; December 31, 2020 – $272,431)
220,832 244,843
Available for sale securities 13,317,922 13,050,665
Fair value option securities 60,432 114,982
Restricted equity securities 134,885 171,391
Residential mortgage loans held for sale 200,842 252,316
Loans 21,416,449 23,007,520
Allowance for loan losses (311,890) (388,640)
Loans, net of allowance 21,104,559 22,618,880
Premises and equipment, net 556,400 551,308
Receivables 195,763 245,880
Goodwill 1,048,091 1,048,091
Intangible assets, net 105,694 113,436
Mortgage servicing rights 117,629 101,172
Real estate and other repossessed assets, net of allowance (June 30, 2021 – $18,662; December 31, 2020 –
$15,060)
57,337 90,526
Derivative contracts, net 1,701,443 810,688
Cash surrender value of bank-owned life insurance 401,163 398,758
Receivable on unsettled securities sales 70,954 62,386
Other assets 901,904 907,218
Total assets $ 47,154,375 $ 46,671,088
Liabilities and Equity
Liabilities:
Noninterest-bearing demand deposits $ 13,380,409 $ 12,266,338
Interest-bearing deposits:
Transaction 21,278,719 21,158,422
Savings 875,456 751,992
Time 1,905,349 1,967,128
Total deposits 37,439,933 36,143,880
Funds purchased and repurchase agreements 730,183 1,662,386
Other borrowings 1,546,231 1,882,970
Subordinated debentures 276,043 276,005
Accrued interest, taxes and expense 199,014 323,667
Derivative contracts, net 612,261 405,779
Due on unsettled securities purchases 576,536 257,627
Other liabilities 419,623 427,213
Total liabilities 41,799,824 41,379,527
Shareholders' equity:
Common stock ($0.00006 par value; 2,500,000,000 shares authorized; shares issued and outstanding: June 30, 2021 – 76,257,743; December 31, 2020 – 75,995,205)
5 5
Capital surplus 1,373,101 1,368,062
Retained earnings 4,214,130 3,973,675
Treasury stock (shares at cost: June 30, 2021 – 7,179,285; December 31, 2020 – 6,357,605)
(481,027) (411,344)
Accumulated other comprehensive gain 226,768 335,868
Total shareholders’ equity 5,332,977 5,266,266
Non-controlling interests 21,574 25,295
Total equity 5,354,551 5,291,561
Total liabilities and equity $ 47,154,375 $ 46,671,088


	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity		Non- Controlling Interests		Total Equity
	Shares	Amount						Shares	Amount



Balance, June 30, 2021	76,258	$	5	$	1,373,101	$	4,214,130	7,179	$	(481,027)	$	226,768	$	5,332,977	$	21,574	$	5,354,551
Net income (loss)	—	—		—		188,322		—	—		—		188,322		(601)		187,721
Other comprehensive loss	—	—		—		—		—	—		(57,596)		(57,596)		—		(57,596)
Repurchase of common stock	—	—		—		—		478	(40,644)		—		(40,644)		—		(40,644)
Share-based compensation plans:
Stock options exercised	—	—		—		—		—	—		—		—		—		—
Non-vested shares awarded, net	(4)	—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—	—		—		—		—	—		—		—		—		—
Share-based compensation	—	—		1,587		—		—	—		—		1,587		—		1,587
Cash dividends on common stock	—	—		—		(35,673)		—	—		—		(35,673)		—		(35,673)
Capital calls and distributions, net	—	—		—		—		—	—		—		—		(13,498)		(13,498)


Balance, September 30, 2021	76,254	$	5	$	1,374,688	$	4,366,779	7,657	$	(521,671)	$	169,172	$	5,388,973	$	7,475	$	5,396,448

Balance, December 31, 2020	75,995	$	5	$	1,368,062	$	3,973,675	6,358	$	(411,344)	$	335,868	$	5,266,266	$	25,295	$	5,291,561


Net income	—	—		—		500,803		—	—		—		500,803		(1,667)		499,136
Other comprehensive income	—	—		—		—		—	—		(166,696)		(166,696)		—		(166,696)
Repurchase of common stock	—	—		—		—		1,231	(104,512)		—		(104,512)		—		(104,512)
Share-based compensation plans:
Stock options exercised	17	—		949		—		—	—		—		949		—		949
Non-vested shares awarded, net	242	—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—	—		—		—		68	(5,815)		—		(5,815)		—		(5,815)
Share-based compensation	—	—		5,677		—		—	—		—		5,677		—		5,677
Cash dividends on common stock	—	—		—		(107,699)		—	—		—		(107,699)		—		(107,699)
Capital calls and distributions, net	—	—		—		—		—	—		—		—		(16,153)		(16,153)


Balance, September 30, 2021	76,254	$	5	$	1,374,688	$	4,366,779	7,657	$	(521,671)	$	169,172	$	5,388,973	$	7,475	$	5,396,448

- 46 -


	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity		Non- Controlling Interests		Total Equity
	Shares	Amount						Shares	Amount

Balance, June 30, 2020	75,999	$	5	$	1,357,706	$	3,737,862	5,693	$	(368,894)	$	370,316	$	5,096,995	$	7,428	$	5,104,423


Net income (loss)	—	—		—		154,034		—	—		—		154,034		58		154,092
Other comprehensive income	—	—		—		—		—	—		(5,146)		(5,146)		—		(5,146)
Repurchase of common stock	—	—		—		—		—	—		—		—		—		—
Share-based compensation plans:
Stock options exercised	—	—		—		—		—	—		—		—		—		—
Non-vested shares awarded, net	(1)	—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—	—		—		—		—	—		—		—		—		—
Share-based compensation	—	—		8,754		—		—	—		—		8,754		—		8,754
Cash dividends on common stock	—	—		—		(35,850)		—	—		—		(35,850)		—		(35,850)
Capital calls and distributions, net	—	—		—		—		—	—		—		—		(164)		(164)


Balance, September 30, 2020	75,998	$	5	$	1,366,460	$	3,856,046	5,693	$	(368,894)	$	365,170	$	5,218,787	$	7,322	$	5,226,109

Balance, December 31, 2019	75,759	$	5	$	1,350,995	$	3,729,778	5,179	$	(329,906)	$	104,923	$	4,855,795	$	8,124	$	4,863,919
Transition adjustment - CECL	—	—		—		(46,696)		—	—		—		(46,696)		—		(46,696)
Balance, January 1, 2020, Adjusted	75,759	5		1,350,995		3,683,082		5,179	(329,906)		104,923		4,809,099		8,124		4,817,223
Net income (loss)	—	—		—		280,806		—	—		—		280,806		(444)		280,362
Other comprehensive income	—	—		—		—		—	—		260,247		260,247		—		260,247
Repurchase of common stock	—	—		—		—		442	(33,380)		—		(33,380)		—		(33,380)
Share-based compensation plans:
Stock options exercised	10	—		586		—		—	—		—		586		—		586
Non-vested shares awarded, net	229	—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—	—		—		—		72	(5,608)		—		(5,608)		—		(5,608)
Share-based compensation	—	—		14,879		—		—	—		—		14,879		—		14,879
Cash dividends on common stock	—	—		—		(107,842)		—	—		—		(107,842)		—		(107,842)
Capital calls and distributions, net	—	—		—		—		—	—		—		—		(358)		(358)


Balance, September 30, 2020	75,998	$	5	$	1,366,460	$	3,856,046	5,693	$	(368,894)	$	365,170	$	5,218,787	$	7,322	$	5,226,109

See accompanying notes to consolidated financial statements.

- ~~46 -~~

~~Consolidated Statements of Changes in Equity (Unaudited)~~

~~(In thousands)~~

Common Stock Capital
Surplus Retained
Earnings Treasury Stock Accumulated
Other
Comprehensive
Income (Loss) Total
Shareholders’
Equity Non-
Controlling
Interests Total Equity
Shares Amount Shares Amount
Balance, March 31, 2021 76,244 $ 5 $ 1,371,735 $ 4,083,543 6,686 $ (437,230) $ 221,409 $ 5,239,462 $ 22,882 $ 5,262,344
Net income (loss) — — — 166,421 — — — 166,421 686 167,107
Other comprehensive loss — — — — — — 5,359 5,359 — 5,359
Repurchase of common stock — — — — 493 (43,797) — (43,797) — (43,797)
Share-based compensation plans:
Stock options exercised 0 — 0 — — — — 0 — 0
Non-vested shares awarded,
     net 14 — 0 — — — — — — —
Vesting of non-vested
     shares — — — — 0 0 — 0 — 0
Share-based compensation — — 1,366 — — — — 1,366 — 1,366
Cash dividends on common
     stock — — — (35,834) — — — (35,834) — (35,834)
Capital calls and distributions,
     net — — — — — — — — (1,994) (1,994)
Balance, June 30, 2021 76,258 $ 5 $ 1,373,101 $ 4,214,130 7,179 $ (481,027) $ 226,768 $ 5,332,977 $ 21,574 $ 5,354,551
Balance, December 31, 2020 75,995 $ 5 $ 1,368,062 $ 3,973,675 6,358 $ (411,344) $ 335,868 $ 5,266,266 $ 25,295 $ 5,291,561
Net income — — — 312,481 — — — 312,481 (1,066) 311,415
Other comprehensive income — — — — — — (109,100) (109,100) — (109,100)
Repurchase of common stock — — — — 753 (63,868) — (63,868) — (63,868)
Share-based compensation
     plans:
Stock options exercised 17 — 949 — — — — 949 — 949
Non-vested shares awarded,
     net 246 — 0 — — — — — — —
Vesting of non-vested
     shares — — — — 68 (5,815) — (5,815) — (5,815)
Share-based compensation — — 4,090 — — — — 4,090 — 4,090
Cash dividends on common
     stock — — — (72,026) — — — (72,026) — (72,026)
Capital calls and distributions,
     net — — — — — — — — (2,655) (2,655)
Balance, June 30, 2021 76,258 $ 5 $ 1,373,101 $ 4,214,130 7,179 $ (481,027) $ 226,768 $ 5,332,977 $ 21,574 $ 5,354,551

- 47 -

Common Stock Capital
Surplus Retained
Earnings Treasury Stock Accumulated
Other
Comprehensive
Income (Loss) Total
Shareholders’
Equity Non-
Controlling
Interests Total Equity
Shares Amount Shares Amount
Balance, March 31, 2020 76,001 $ 5 $ 1,354,826 $ 3,709,019 5,692 $ (368,894) $ 331,292 $ 5,026,248 $ 7,912 $ 5,034,160
Net income (loss) — — — 64,693 — — — 64,693 (407) 64,286
Other comprehensive income — — — — — — 39,024 39,024 — 39,024
Repurchase of common stock — — — — 0 0 — 0 — 0
Share-based compensation
     plans:
Stock options exercised 0 — 0 — — — — 0 — 0
Non-vested shares awarded,
     net (2) — 0 — — — — — — —
Vesting of non-vested
     shares — — — — 1 0 — 0 — 0
Share-based compensation — — 2,880 — — — — 2,880 — 2,880
Cash dividends on common
     stock — — — (35,850) — — — (35,850) — (35,850)
Capital calls and distributions,
     net — — — — — — — — (77) (77)
Balance, June 30, 2020 75,999 $ 5 $ 1,357,706 $ 3,737,862 5,693 $ (368,894) $ 370,316 $ 5,096,995 $ 7,428 $ 5,104,423
Balance, December 31, 2019 75,759 $ 5 $ 1,350,995 $ 3,729,778 5,179 $ (329,906) $ 104,923 $ 4,855,795 $ 8,124 $ 4,863,919
Transition adjustment - CECL — — — (46,696) — — — (46,696) — (46,696)
Balance, January 1, 2020,
     Adjusted 75,759 5 1,350,995 3,683,082 5,179 (329,906) 104,923 4,809,099 8,124 4,817,223
Net income (loss) — — — 126,772 — — — 126,772 (502) 126,270
Other comprehensive income — — — — — — 265,393 265,393 — 265,393
Repurchase of common stock — — — — 442 (33,380) — (33,380) — (33,380)
Share-based compensation
     plans:
Stock options exercised 10 — 586 — — — — 586 — 586
Non-vested shares awarded,
     net 230 — 0 — — — — — — —
Vesting of non-vested
     shares — — — — 72 (5,608) — (5,608) — (5,608)
Share-based compensation — — 6,125 — — — — 6,125 — 6,125
Cash dividends on common
     stock — — — (71,992) — — — (71,992) — (71,992)
Capital calls and distributions,
     net — — — — — — — — (194) (194)
Balance, June 30, 2020 75,999 $ 5 $ 1,357,706 $ 3,737,862 5,693 $ (368,894) $ 370,316 $ 5,096,995 $ 7,428 $ 5,104,423

~~See accompanying notes to consolidated financial statements.~~

~~- 48~~ -

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


		Six Months Ended					Nine Months Ended
		June 30,					September 30,
		2021		2020			2021		2020
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:					Cash Flows From Operating Activities:
Net income	Net income	$	311,415	$	126,270	Net income	$	499,136	$	280,362
Adjustments to reconcile net income to net cash provided used in operating activities:
Adjustments to reconcile net income to net cash provided (used in) operating activities:						Adjustments to reconcile net income to net cash provided (used in) operating activities:
Provision for credit losses	Provision for credit losses	(60,000)		229,092		Provision for credit losses	(83,000)		229,092
Change in fair value of mortgage servicing rights due to market assumption changes	Change in fair value of mortgage servicing rights due to market assumption changes	(20,833)		89,241		Change in fair value of mortgage servicing rights due to market assumption changes	(33,778)		85,800
Change in the fair value of mortgage servicing rights due to principal payments	Change in the fair value of mortgage servicing rights due to principal payments	22,143		17,779		Change in the fair value of mortgage servicing rights due to principal payments	30,949		28,971
Net unrealized (gains) losses from derivative contracts	Net unrealized (gains) losses from derivative contracts	40,581		(56,678)		Net unrealized (gains) losses from derivative contracts	81,667		(51,323)
Share-based compensation	Share-based compensation	4,090		6,125		Share-based compensation	5,677		14,879
Depreciation and amortization	Depreciation and amortization	50,185		47,016		Depreciation and amortization	76,196		74,330
Net amortization of discounts and premiums	Net amortization of discounts and premiums	9,607		7,199		Net amortization of discounts and premiums	14,286		1,921
Net losses (gains) on financial instruments and other losses (gains), net	Net losses (gains) on financial instruments and other losses (gains), net	(28,463)		(2,186)		Net losses (gains) on financial instruments and other losses (gains), net	(57,467)		(4,216)
Net gain on mortgage loans held for sale	Net gain on mortgage loans held for sale	(41,611)		(42,411)		Net gain on mortgage loans held for sale	(56,423)		(77,039)
Mortgage loans originated for sale	Mortgage loans originated for sale	(1,597,946)		(1,733,205)		Mortgage loans originated for sale	(2,250,282)		(2,773,686)
Proceeds from sale of mortgage loans held for sale	Proceeds from sale of mortgage loans held for sale	1,684,711		1,654,433		Proceeds from sale of mortgage loans held for sale	2,376,479		2,757,412
Capitalized mortgage servicing rights	Capitalized mortgage servicing rights	(17,767)		(13,906)		Capitalized mortgage servicing rights	(29,307)		(21,330)

Change in trading and fair value option securities	Change in trading and fair value option securities	(936,759)		801,215		Change in trading and fair value option securities	(782,380)		338,992
Change in receivables	Change in receivables	60,286		(724,486)		Change in receivables	97,430		(936,428)
Change in other assets	Change in other assets	(16)		(29,352)		Change in other assets	206		(8,574)
Change in other liabilities	Change in other liabilities	32,611		410,314		Change in other liabilities	27,285		421,364
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	(487,766)		786,460		Net cash provided by (used in) operating activities	(83,326)		360,527
Cash Flows From Investing Activities:	Cash Flows From Investing Activities:					Cash Flows From Investing Activities:
Proceeds from maturities or redemptions of investment securities	Proceeds from maturities or redemptions of investment securities	23,870		23,296		Proceeds from maturities or redemptions of investment securities	28,970		35,967
Proceeds from maturities or redemptions of available for sale securities	Proceeds from maturities or redemptions of available for sale securities	1,782,153		1,070,585		Proceeds from maturities or redemptions of available for sale securities	2,682,934		1,813,057

Purchases of available for sale securities	Purchases of available for sale securities	(2,602,658)		(2,139,775)		Purchases of available for sale securities	(3,704,636)		(3,238,556)
Proceeds from sales of available for sale securities	Proceeds from sales of available for sale securities	394,146		205,945		Proceeds from sales of available for sale securities	488,274		206,979
Change in amount receivable on unsettled available for sale securities transactions	Change in amount receivable on unsettled available for sale securities transactions	(19,509)		(118,744)		Change in amount receivable on unsettled available for sale securities transactions	(176,600)		3,988
Loans originated, net of principal collected	Loans originated, net of principal collected	1,621,847		(2,294,658)		Loans originated, net of principal collected	2,690,611		(1,894,663)
Net payments on derivative asset contracts	Net payments on derivative asset contracts	(232,861)		(67,105)		Net payments on derivative asset contracts	33,183		(96,109)

Net change in restricted equity securities	Net change in restricted equity securities	36,506		334,869		Net change in restricted equity securities	93,849		348,896
Proceeds from disposition of assets	Proceeds from disposition of assets	70,443		41,269		Proceeds from disposition of assets	141,006		62,677
Purchases of assets	Purchases of assets	(95,077)		(82,684)		Purchases of assets	(130,146)		(116,800)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	978,860		(3,027,002)		Net cash provided by (used in) investing activities	2,147,445		(2,874,564)
Cash Flows From Financing Activities:	Cash Flows From Financing Activities:					Cash Flows From Financing Activities:
Net change in demand deposits, transaction deposits and savings accounts	Net change in demand deposits, transaction deposits and savings accounts	1,357,832		6,136,235		Net change in demand deposits, transaction deposits and savings accounts	2,567,084		7,561,708
Net change in time deposits	Net change in time deposits	(61,779)		134,911		Net change in time deposits	(186,413)		(209,876)
Net change in other borrowed funds	Net change in other borrowed funds	(1,324,500)		(3,971,540)		Net change in other borrowed funds	(2,734,198)		(4,839,524)

Repayment of subordinated debentures						Repayment of subordinated debentures	(150,000)		—

Net proceeds on derivative liability contracts	Net proceeds on derivative liability contracts	234,074		60,851		Net proceeds on derivative liability contracts	(32,591)		102,064
Net change in derivative margin accounts	Net change in derivative margin accounts	(649,717)		(96,114)		Net change in derivative margin accounts	(834,108)		(260,949)
Change in amount due on unsettled available for sale securities transactions	Change in amount due on unsettled available for sale securities transactions	172,638		75,544		Change in amount due on unsettled available for sale securities transactions	234,589		54,408
Issuance of common and treasury stock, net	Issuance of common and treasury stock, net	(4,866)		(5,022)		Issuance of common and treasury stock, net	(4,866)		(5,022)

Repurchase of common stock	Repurchase of common stock	(63,868)		(33,380)		Repurchase of common stock	(104,512)		(33,380)
Dividends paid	Dividends paid	(72,026)		(71,992)		Dividends paid	(107,699)		(107,842)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(412,212)		2,229,493		Net cash provided by (used in) financing activities	(1,352,714)		2,261,587
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	78,882		(11,049)		Net increase (decrease) in cash and cash equivalents	711,405		(252,450)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,180,573		1,258,821		Cash and cash equivalents at beginning of period	1,180,573		1,258,821
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,259,455	$	1,247,772	Cash and cash equivalents at end of period	$	1,891,978	$	1,006,371

Supplemental Cash Flow Information:	Supplemental Cash Flow Information:					Supplemental Cash Flow Information:
Cash paid for interest	Cash paid for interest	$	32,161	$	117,471	Cash paid for interest	$	52,304	$	138,877
Cash paid for taxes	Cash paid for taxes	$	96,994	$	5,470	Cash paid for taxes	$	120,879	$	91,977
Net loans and bank premises transferred to repossessed real estate and other assets	Net loans and bank premises transferred to repossessed real estate and other assets	$	289	$	19,556	Net loans and bank premises transferred to repossessed real estate and other assets	$	8,175	$	42,099
Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period	Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period	$	55,558	$	157,300	Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period	$	69,541	$	239,200
Conveyance of other real estate owned guaranteed by U.S. government agencies	Conveyance of other real estate owned guaranteed by U.S. government agencies	$	3,009	$	6,255	Conveyance of other real estate owned guaranteed by U.S. government agencies	$	4,956	$	9,165
Right-of-use assets obtained in exchange for operating lease liabilities	Right-of-use assets obtained in exchange for operating lease liabilities	$	6,192	$	9,151	Right-of-use assets obtained in exchange for operating lease liabilities	$	14,551	$	9,481

See accompanying notes to consolidated financial statements.

- 4948 -

Notes to Consolidated Financial Statements (Unaudited)

(1) Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of BOK Financial Corporation (“BOK Financial” or “the Company”) have been prepared in accordance with accounting principles for interim financial information generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The unaudited consolidated financial statements include accounts of BOK Financial and its subsidiaries, principally BOKF, NA (“the Bank”), BOK Financial Securities, Inc., and BOK Financial Private Wealth, Inc. Operating divisions of the Bank include Bank of Albuquerque, Bank of Oklahoma, Bank of Texas, BOK Financial in Arizona, Arkansas, Colorado and Kansas/Missouri, BOK Financial Mortgage and the TransFund electronic funds network.

Certain reclassifications have been made to conform to the current period presentation.

The financial information should be read in conjunction with BOK Financial’s 2020 Form 10-K filed with the Securities and Exchange Commission, which contains audited financial statements. Amounts presented as of December 31, 2020 have been derived from the audited financial statements included in BOK Financial’s 2020 Form 10-K but do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the ~~six-month~~nine-month period ended ~~June~~September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Newly Adopted and Pending Accounting Policies

Financial Accounting Standards Board (“FASB”)

FASB Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04")

On March 12, 2020, the FASB issued ASU 2020-04 which provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022. Adoption of ASU 2020-04 is not expected to have a material impact on the Company's financial statements.

FASB Accounting Standards Update No. 2021-01, Reference Rate Reform (Topic 848): Scope ("ASU 2021-01")

On January 7, 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in this update are elective and apply to all entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The amendments also optionally apply to all entities that designate receive-variable rate, pay-variable-rate cross-currency interest rate swaps as hedging instruments in net investment hedges that are modified as a result of reference rate reform. ASU 2021-01 is effective immediately for all entities and amendments may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020. Adoption of ASU 2021-01 is not expected to have a material impact on the Company's financial statements.

- 5049 -

(2) Securities

Trading Securities

The fair value and net unrealized gain (loss) included in trading securities are as follows (in thousands):


		June 30, 2021				December 31, 2020					September 30, 2021				December 31, 2020
		Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)			Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)
U.S. government securities	U.S. government securities	$	13,481	$	(1)	$	9,183	$	0	U.S. government securities	$	8,863	$	(6)	$	9,183	$	—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	5,577,986		(9,598)		4,669,148		(3,624)		Residential agency mortgage-backed securities	5,469,676		(24,868)		4,669,148		(3,624)
Municipal securities	Municipal securities	49,636		(20)		19,172		42		Municipal securities	35,894		(261)		19,172		42

Other debt securities	Other debt securities	57,967		(25)		10,472		22		Other debt securities	39,607		(73)		10,472		22
Total trading securities	Total trading securities	$	5,699,070	$	(9,644)	$	4,707,975	$	(3,560)	Total trading securities	$	5,554,040	$	(25,208)	$	4,707,975	$	(3,560)

Investment Securities

The amortized cost and fair values of investment securities are as follows (in thousands):


		June 30, 2021									September 30, 2021
		Amortized		Fair		Gross Unrealized					Amortized		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value		Gain		Loss
Municipal securities	Municipal securities	$	211,725	$	235,697	$	23,986	$	(14)	Municipal securities	$	207,393	$	229,149	$	21,778	$	(22)
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	7,863		8,601		738		0		Residential agency mortgage-backed securities	7,412		8,084		672		—
Other debt securities	Other debt securities	1,737		1,736		0		(1)		Other debt securities	1,257		1,256		—		(1)
Total investment securities	Total investment securities	221,325		246,034		24,724		(15)		Total investment securities	216,062		238,489		22,450		(23)
Allowance for credit losses	Allowance for credit losses	(493)								Allowance for credit losses	(470)
Investment securities, net of allowance	Investment securities, net of allowance	$	220,832	$	246,034	$	24,724	$	(15)	Investment securities, net of allowance	$	215,592	$	238,489	$	22,450	$	(23)


		December 31, 2020									December 31, 2020
		Amortized		Fair		Gross Unrealized					Amortized		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value		Gain		Loss
Municipal securities	Municipal securities	$	229,245	$	255,270	$	26,169	$	(144)	Municipal securities	$	229,245	$	255,270	$	26,169	$	(144)
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	8,913		9,790		877		0		Residential agency mortgage-backed securities	8,913		9,790		877		—
Other debt securities	Other debt securities	7,373		7,371		0		(2)		Other debt securities	7,373		7,371		—		(2)
Total investment securities	Total investment securities	245,531		272,431		27,046		(146)		Total investment securities	245,531		272,431		27,046		(146)
Allowance for credit losses	Allowance for credit losses	(688)								Allowance for credit losses	(688)
Investment securities, net of allowance	Investment securities, net of allowance	$	244,843	$	272,431	$	27,046	$	(146)	Investment securities, net of allowance	$	244,843	$	272,431	$	27,046	$	(146)

- 5150 -

The amortized cost and fair values of investment securities at ~~June~~September 30, 2021, by contractual maturity, are as shown in the following table (dollars in thousands):


		Less than One Year		One to Five Years		Six to Ten Years		Over Ten Years		Total		Weighted Average Maturity1		Less than One Year		One to Five Years		Six to Ten Years		Over Ten Years		Total		Weighted Average Maturity1
Fixed maturity debt securities:	Fixed maturity debt securities:												Fixed maturity debt securities:
Amortized cost	Amortized cost	$	24,344	$	106,071	$	76,287	$	6,760	$	213,462	4.81	Amortized cost	$	23,860	$	106,035	$	72,476	$	6,279	$	208,650	4.61
Fair value	Fair value	24,881		122,166		83,482		6,904		237,433			Fair value	24,270		121,113		78,661		6,361		230,405
Residential mortgage-backed securities:	Residential mortgage-backed securities:												Residential mortgage-backed securities:
Amortized cost	Amortized cost									$	7,863	2	Amortized cost									$	7,412	2
Fair value	Fair value									8,601			Fair value									8,084
Total investment securities:	Total investment securities:												Total investment securities:
Amortized cost	Amortized cost									$	221,325		Amortized cost									$	216,062
Fair value	Fair value									246,034			Fair value									238,489

1Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty.

2The average expected lives of residential mortgage-backed securities were ~~4.3~~4.2 years based upon current prepayment assumptions.

Temporarily Impaired Investment Securities

(in thousands):


		June 30, 2021																					September 30, 2021
		Number of Securities		Less Than 12 Months						12 Months or Longer						Total							Number of Securities		Less Than 12 Months						12 Months or Longer						Total
			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss						Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Investment:	Investment:																					Investment:
Municipal securities	Municipal securities	1		$	0		$	0		$	587		$	14		$	587		$	14	Municipal securities		2		$	942		$	2		$	582		$	20		$	1,524		$	22

Other debt securities	Other debt securities	2		275			1			0			0			275			1		Other debt securities		2		275			1			—			—			275			1
Total investment securities	Total investment securities	3		$	275		$	1		$	587		$	14		$	862		$	15	Total investment securities		4		$	1,217		$	3		$	582		$	20		$	1,799		$	23


	December 31, 2020
	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investment:
Municipal securities	6	$	2,451	$	40	$	2,043	$	104	$	4,494	$	144

Other debt securities	2	250		1		25		1		275		2
Total investment securities	8	$	2,701	$	41	$	2,068	$	105	$	4,769	$	146

- 5251 -

Available for Sale Securities

The amortized cost and fair value of available for sale securities are as follows (in thousands):


		June 30, 2021									September 30, 2021
		Amortized		Fair		Gross Unrealized					Amortized		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value		Gain		Loss
U.S. Treasury	U.S. Treasury	$	500	$	504	$	4	$	0	U.S. Treasury	$	500	$	502	$	2	$	—
Municipal securities	Municipal securities	387,257		386,509		1,798		(2,546)		Municipal securities	464,368		461,619		1,396		(4,145)
Mortgage-backed securities:	Mortgage-backed securities:									Mortgage-backed securities:
Residential agency	Residential agency	8,406,672		8,624,876		247,171		(28,967)		Residential agency	7,988,834		8,168,025		217,045		(37,854)
Residential non-agency	Residential non-agency	13,468		28,261		14,793		0		Residential non-agency	11,875		26,072		14,197		—
Commercial agency	Commercial agency	4,212,258		4,277,301		75,310		(10,267)		Commercial agency	4,654,549		4,685,423		60,223		(29,349)
Other debt securities	Other debt securities	500		471		0		(29)		Other debt securities	500		472		—		(28)
Total available for sale securities	Total available for sale securities	$	13,020,655	$	13,317,922	$	339,076	$	(41,809)	Total available for sale securities	$	13,120,626	$	13,342,113	$	292,863	$	(71,376)


		December 31, 2020									December 31, 2020
		Amortized		Fair		Gross Unrealized					Amortized		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value		Gain		Loss
U.S. Treasury	U.S. Treasury	$	500	$	508	$	8	$	0	U.S. Treasury	$	500	$	508	$	8	$	—
Municipal securities	Municipal securities	165,318		167,979		2,666		(5)		Municipal securities	165,318		167,979		2,666		(5)
Mortgage-backed securities:	Mortgage-backed securities:									Mortgage-backed securities:
Residential agency	Residential agency	9,019,013		9,340,471		328,183		(6,725)		Residential agency	9,019,013		9,340,471		328,183		(6,725)
Residential non-agency	Residential non-agency	17,563		32,770		15,207		0		Residential non-agency	17,563		32,770		15,207		—
Commercial agency	Commercial agency	3,406,956		3,508,465		103,590		(2,081)		Commercial agency	3,406,956		3,508,465		103,590		(2,081)
Other debt securities	Other debt securities	500		472		0		(28)		Other debt securities	500		472		—		(28)
Total available for sale securities	Total available for sale securities	$	12,609,850	$	13,050,665	$	449,654	$	(8,839)	Total available for sale securities	$	12,609,850	$	13,050,665	$	449,654	$	(8,839)

The amortized cost and fair values of available for sale securities at ~~June~~September 30, 2021, by contractual maturity, are as shown in the following table (dollars in thousands):


		Less than One Year		One to Five Years		Six to Ten Years		Over Ten Years		Total		Weighted Average Maturity1		Less than One Year		One to Five Years		Six to Ten Years		Over Ten Years		Total		Weighted Average Maturity1
Fixed maturity debt securities:	Fixed maturity debt securities:												Fixed maturity debt securities:
Amortized cost	Amortized cost	$	85,688	$	1,714,881	$	2,116,584	$	683,362	$	4,600,515	7.82	Amortized cost	$	62,357	$	2,015,024	$	2,495,766	$	546,770	$	5,119,917	6.89
Fair value	Fair value	86,175		1,764,174		2,116,490		697,946		4,664,785			Fair value	62,773		2,055,544		2,475,406		554,293		5,148,016
Residential mortgage-backed securities:	Residential mortgage-backed securities:												Residential mortgage-backed securities:
Amortized cost	Amortized cost									$	8,420,140	2	Amortized cost									$	8,000,709	2
Fair value	Fair value									8,653,137			Fair value									8,194,097
Total available for sale securities:	Total available for sale securities:												Total available for sale securities:
Amortized cost	Amortized cost									$	13,020,655		Amortized cost									$	13,120,626
Fair value	Fair value									13,317,922			Fair value									13,342,113

1Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.

2The average expected lives of residential mortgage-backed securities were ~~3.3~~3.6 years based upon current prepayment assumptions.

- 5352 -

Sales of available for sale securities resulted in gains and losses as follows (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Proceeds	Proceeds	$	338,109	$	179,051	$	394,146	$	205,945	Proceeds	$	94,128	$	1,034	$	488,274	$	206,979
Gross realized gains	Gross realized gains	1,767		5,580		2,240		5,583		Gross realized gains	1,572		54		3,812		5,637
Gross realized losses	Gross realized losses	(337)		0		(343)		0		Gross realized losses	(317)		(66)		(660)		(66)
Related federal and state income tax expense (benefit)	Related federal and state income tax expense (benefit)	336		1,421		455		1,422		Related federal and state income tax expense (benefit)	301		(3)		756		1,419

The fair value of debt securities pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was ~~$9.5~~$8.8 billion at ~~June~~September 30, 2021 and $11.6 billion at December 31, 2020. The secured parties do not have the right to sell or repledge these securities.

Temporarily Impaired Available for Sale Securities

(in thousands)


		June 30, 2021																					September 30, 2021
		Number of Securities		Less Than 12 Months						12 Months or Longer						Total							Number of Securities		Less Than 12 Months						12 Months or Longer						Total
			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss						Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Available for sale:	Available for sale:																					Available for sale:

Municipal securities	Municipal securities	91		$	260,980		$	2,546		$	0		$	0		$	260,980		$	2,546	Municipal securities		140		$	362,508		$	4,145		$	—		$	—		$	362,508		$	4,145
Mortgage-backed securities:	Mortgage-backed securities:																				Mortgage-backed securities:
Residential agency	Residential agency	88		2,508,370			27,595			190,052			1,372			2,698,422			28,967		Residential agency		100		2,384,362			29,149			429,246			8,705			2,813,608			37,854

Commercial agency	Commercial agency	80		1,046,798			9,879			344,518			388			1,391,316			10,267		Commercial agency		147		2,117,039			26,802			406,327			2,547			2,523,366			29,349
Other debt securities	Other debt securities	1		0			0			471			29			471			29		Other debt securities		1		—			—			472			28			472			28
Total available for sale securities	Total available for sale securities	260		$	3,816,148		$	40,020		$	535,041		$	1,789		$	4,351,189		$	41,809	Total available for sale securities		388		$	4,863,909		$	60,096		$	836,045		$	11,280		$	5,699,954		$	71,376


		December 31, 2020																					December 31, 2020
		Number of Securities		Less Than 12 Months						12 Months or Longer						Total							Number of Securities		Less Than 12 Months						12 Months or Longer						Total
			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss						Fair Value			Unrealized Loss			Fair Value			Unrealized Loss			Fair Value			Unrealized Loss
Available for sale:	Available for sale:																					Available for sale:

Municipal securities	Municipal securities	1		$	6,166		$	5		$	0		$	0		$	6,166		$	5	Municipal securities		1		$	6,166		$	5		$	—		$	—		$	6,166		$	5
Mortgage-backed securities:	Mortgage-backed securities:																				Mortgage-backed securities:
Residential agency	Residential agency	38		786,890			6,605			160,747			120			947,637			6,725		Residential agency		38		786,890			6,605			160,747			120			947,637			6,725

Commercial agency	Commercial agency	37		350,506			1,587			277,627			494			628,133			2,081		Commercial agency		37		350,506			1,587			277,627			494			628,133			2,081
Other debt securities	Other debt securities	1		0			0			472			28			472			28		Other debt securities		1		—			—			472			28			472			28
Total available for sale securities	Total available for sale securities	77		$	1,143,562		$	8,197		$	438,846		$	642		$	1,582,408		$	8,839	Total available for sale securities		77		$	1,143,562		$	8,197		$	438,846		$	642		$	1,582,408		$	8,839

Based on evaluations of impaired securities as of ~~June~~September 30, 2021, the Company does not intend to sell any impaired available for sale debt securities before fair value recovers to the current amortized cost and it is more-likely-than-not that the Company will not be required to sell impaired securities before fair value recovers, which may be maturity.

- 5453 -

Fair Value Option Securities

Fair value option securities represent securities which the Company has elected to carry at fair value and are separately identified on the Consolidated Balance Sheets. Changes in the fair value are recognized in earnings as they occur. Certain securities are held as an economic hedge of the mortgage servicing rights.

The fair value and net unrealized gain (loss) included in fair value option securities is as follows (in thousands):

June 30, 2021 December 31, 2020
Fair Value Net Unrealized Gain (Loss) Fair Value Net Unrealized Gain (Loss)
Residential agency mortgage-backed securities $ 60,432 $ 2,596 $ 114,982 $ 4,463


	September 30, 2021				December 31, 2020
	Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)

Residential agency mortgage-backed securities	$	51,019	$	2,220	$	114,982	$	4,463

- 5554 -

(3) 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. 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.

Trading

BOK Financial may offer derivative instruments such as to-be-announced securities to mortgage banking customers to enable them to manage their market risk or to mitigate the Company's market risk of holding trading securities. Changes in the fair value of derivative instruments for trading purposes or used to mitigate the market risk of holding trading securities are included in Other operating revenue – Brokerage and trading revenue.

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. 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.

As discussed in Note 5, 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 5 for additional discussion of notional, fair value and impact on earnings of these contracts.

- 5655 -

The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at ~~June~~September 30, 2021 (in thousands):


		Assets													Assets
		Notional1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral			Notional1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral
Customer risk management programs:	Customer risk management programs:													Customer risk management programs:
Interest rate contracts	Interest rate contracts	$	2,983,763	$	78,138	$	(6,342)	$	71,796	$	0	$	71,796	Interest rate contracts	$	3,010,596	$	70,372	$	(6,971)	$	63,401	$	—	$	63,401
Energy contracts	Energy contracts	5,049,908		1,206,874		(215,206)		991,668		0		991,668		Energy contracts	5,901,682		1,743,938		(412,176)		1,331,762		—		1,331,762
Agricultural contracts	Agricultural contracts	7,983		382		(350)		32		0		32		Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	Foreign exchange contracts	571,224		569,144		0		569,144		(900)		568,244		Foreign exchange contracts	301,216		299,335		—		299,335		(666)		298,669
Equity option contracts	Equity option contracts	59,014		1,418		0		1,418		(300)		1,118		Equity option contracts	48,713		865		—		865		(266)		599
Total customer risk management programs	Total customer risk management programs	8,671,892		1,855,956		(221,898)		1,634,058		(1,200)		1,632,858		Total customer risk management programs	9,262,207		2,114,510		(419,147)		1,695,363		(932)		1,694,431
Trading	Trading	57,953,169		189,111		(125,437)		63,674		(4,416)		59,258		Trading	66,331,907		589,601		(383,764)		205,837		(1,126)		204,711
Internal risk management programs	Internal risk management programs	783,074		17,116		(7,789)		9,327		0		9,327		Internal risk management programs	270,877		7,606		(5,612)		1,994		—		1,994
Total derivative contracts	Total derivative contracts	$	67,408,135	$	2,062,183	$	(355,124)	$	1,707,059	$	(5,616)	$	1,701,443	Total derivative contracts	$	75,864,991	$	2,711,717	$	(808,523)	$	1,903,194	$	(2,058)	$	1,901,136

		Liabilities													Liabilities
		Notional1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral			Notional1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral
Customer risk management programs:	Customer risk management programs:													Customer risk management programs:
Interest rate contracts	Interest rate contracts	$	2,983,763	$	78,401	$	(6,342)	$	72,059	$	(65,484)	$	6,575	Interest rate contracts	$	3,010,596	$	70,612	$	(6,971)	$	63,641	$	(56,405)	$	7,236
Energy contracts	Energy contracts	5,051,395		1,205,095		(215,206)		989,889		(975,704)		14,185		Energy contracts	5,787,366		1,778,045		(412,176)		1,365,869		(1,096,209)		269,660
Agricultural contracts	Agricultural contracts	7,977		372		(350)		22		(22)		0		Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	Foreign exchange contracts	571,037		568,758		0		568,758		(519)		568,239		Foreign exchange contracts	300,212		298,208		—		298,208		—		298,208
Equity option contracts	Equity option contracts	59,014		1,418		0		1,418		0		1,418		Equity option contracts	48,713		865		—		865		—		865
Total customer risk management programs	Total customer risk management programs	8,673,186		1,854,044		(221,898)		1,632,146		(1,041,729)		590,417		Total customer risk management programs	9,146,887		2,147,730		(419,147)		1,728,583		(1,152,614)		575,969
Trading	Trading	54,179,938		171,344		(125,437)		45,907		(25,390)		20,517		Trading	61,791,246		562,083		(383,764)		178,319		(16,046)		162,273
Internal risk management programs	Internal risk management programs	783,110		9,116		(7,789)		1,327		0		1,327		Internal risk management programs	1,303,792		15,419		(5,612)		9,807		(8,408)		1,399
Total derivative contracts	Total derivative contracts	$	63,636,234	$	2,034,504	$	(355,124)	$	1,679,380	$	(1,067,119)	$	612,261	Total derivative contracts	$	72,241,925	$	2,725,232	$	(808,523)	$	1,916,709	$	(1,177,068)	$	739,641

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

- 5756 -

The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at December 31, 2020 (in thousands):


		Assets													Assets
		Notional 1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral			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:	Customer risk management programs:													Customer risk management programs:
Interest rate contracts	Interest rate contracts	$	3,212,469	$	113,524	$	(144)	$	113,380	$	0	$	113,380	Interest rate contracts	$	3,212,469	$	113,524	$	(144)	$	113,380	$	—	$	113,380
Energy contracts	Energy contracts	3,791,565		386,008		(211,468)		174,540		0		174,540		Energy contracts	3,791,565		386,008		(211,468)		174,540		—		174,540
Agricultural contracts	Agricultural contracts	14,765		3,859		0		3,859		0		3,859		Agricultural contracts	14,765		3,859		—		3,859		—		3,859
Foreign exchange contracts	Foreign exchange contracts	337,001		332,257		0		332,257		(420)		331,837		Foreign exchange contracts	337,001		332,257		—		332,257		(420)		331,837
Equity option contracts	Equity option contracts	70,199		1,222		0		1,222		(285)		937		Equity option contracts	70,199		1,222		—		1,222		(285)		937
Total customer risk management programs	Total customer risk management programs	7,425,999		836,870		(211,612)		625,258		(705)		624,553		Total customer risk management programs	7,425,999		836,870		(211,612)		625,258		(705)		624,553
Trading	Trading	84,997,593		440,627		(240,655)		199,972		(26,958)		173,014		Trading	84,997,593		440,627		(240,655)		199,972		(26,958)		173,014
Internal risk management programs	Internal risk management programs	995,123		17,352		(4,231)		13,121		0		13,121		Internal risk management programs	995,123		17,352		(4,231)		13,121		—		13,121
Total derivative contracts	Total derivative contracts	$	93,418,715	$	1,294,849	$	(456,498)	$	838,351	$	(27,663)	$	810,688	Total derivative contracts	$	93,418,715	$	1,294,849	$	(456,498)	$	838,351	$	(27,663)	$	810,688

		Liabilities													Liabilities
		Notional 1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral			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:	Customer risk management programs:													Customer risk management programs:
Interest rate contracts	Interest rate contracts	$	3,212,469	$	113,900	$	(144)	$	113,756	$	(104,202)	$	9,554	Interest rate contracts	$	3,212,469	$	113,900	$	(144)	$	113,756	$	(104,202)	$	9,554
Energy contracts	Energy contracts	3,617,678		361,334		(211,468)		149,866		(114,070)		35,796		Energy contracts	3,617,678		361,334		(211,468)		149,866		(114,070)		35,796
Agricultural contracts	Agricultural contracts	14,781		3,844		0		3,844		(3,844)		0		Agricultural contracts	14,781		3,844		—		3,844		(3,844)		—
Foreign exchange contracts	Foreign exchange contracts	336,223		331,035		0		331,035		(1,165)		329,870		Foreign exchange contracts	336,223		331,035		—		331,035		(1,165)		329,870
Equity option contracts	Equity option contracts	70,199		1,222		0		1,222		0		1,222		Equity option contracts	70,199		1,222		—		1,222		—		1,222
Total customer risk management programs	Total customer risk management programs	7,251,350		811,335		(211,612)		599,723		(223,281)		376,442		Total customer risk management programs	7,251,350		811,335		(211,612)		599,723		(223,281)		376,442
Trading	Trading	88,929,916		414,801		(240,655)		174,146		(145,692)		28,454		Trading	88,929,916		414,801		(240,655)		174,146		(145,692)		28,454
Internal risk management programs	Internal risk management programs	145,256		5,529		(4,231)		1,298		(415)		883		Internal risk management programs	145,256		5,529		(4,231)		1,298		(415)		883
Total derivative contracts	Total derivative contracts	$	96,326,522	$	1,231,665	$	(456,498)	$	775,167	$	(369,388)	$	405,779	Total derivative contracts	$	96,326,522	$	1,231,665	$	(456,498)	$	775,167	$	(369,388)	$	405,779

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

- 5857 -

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									Three Months Ended
		June 30, 2021				June 30, 2020					September 30, 2021				September 30, 2020
		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		Brokerage and Trading Revenue		Gain (Loss) on Derivatives, Net
Customer risk management programs:	Customer risk management programs:									Customer risk management programs:
Interest rate contracts	Interest rate contracts	$	1,016	$	0	$	746	$	0	Interest rate contracts	$	1,283	$	—	$	1,014	$	—
Energy contracts	Energy contracts	594		0		5,383		0		Energy contracts	5,528		—		7,460		—
Agricultural contracts	Agricultural contracts	10		0		6		0		Agricultural contracts	(1)		—		6		—
Foreign exchange contracts	Foreign exchange contracts	185		0		107		0		Foreign exchange contracts	120		—		162		—
Equity option contracts	Equity option contracts	0		0		0		0		Equity option contracts	—		—		—		—
Total customer risk management programs	Total customer risk management programs	1,805		0		6,242		0		Total customer risk management programs	6,930		—		8,642		—
Trading1	Trading1	59,331		0		32,577		0		Trading1	9,952		—		(468)		—
Internal risk management programs	Internal risk management programs	0		18,820		0		21,885		Internal risk management programs	—		(5,760)		—		2,354
Total derivative contracts	Total derivative contracts	$	61,136	$	18,820	$	38,819	$	21,885	Total derivative contracts	$	16,882	$	(5,760)	$	8,174	$	2,354

1 Represents changes in fair value of to-be-announced securities and other derivative instruments held to mitigate market risk of trading securities portfolio, which is offset by changes in fair value of trading securities also included in Brokerage and Trading Revenue in the Consolidated Statements of Earnings.


		Six Months Ended									Nine Months Ended
		June 30, 2021				June 30, 2020					September 30, 2021				September 30, 2020
		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		Brokerage and Trading Revenue		Gain (Loss) on Derivatives, Net
Customer risk management programs:	Customer risk management programs:									Customer risk management programs:

Interest rate contracts	Interest rate contracts	2,404		0		1,688		0		Interest rate contracts	3,687		—		2,702		—
Energy contracts	Energy contracts	1,614		0		7,390		0		Energy contracts	7,142		—		14,850		—
Agricultural contracts	Agricultural contracts	28		0		21		0		Agricultural contracts	27		—		27		—
Foreign exchange contracts	Foreign exchange contracts	351		0		365		0		Foreign exchange contracts	471		—		527		—
Equity option contracts	Equity option contracts	0		0		0		0		Equity option contracts	—		—		—		—
Total customer risk management programs	Total customer risk management programs	4,397		0		9,464		0		Total customer risk management programs	11,327		—		18,106		—
Trading1	Trading1	(11,928)		0		(8,078)		0		Trading1	(1,976)		—		(8,546)		—
Internal risk management programs	Internal risk management programs	0		(8,830)		0		40,305		Internal risk management programs	—		(14,590)		—		42,659
Total derivative contracts	Total derivative contracts	$	(7,531)	$	(8,830)	$	1,386	$	40,305	Total derivative contracts	$	9,351	$	(14,590)	$	9,560	$	42,659

- 5958 -

(4) Loans and Allowances for Credit Losses

Loans

Loans are either secured or unsecured based on the type of loan and the financial condition of the borrower. Repayment is generally expected from cash flow or proceeds from the sale of selected assets of the borrower. BOK Financial is exposed to risk of loss on loans due to the borrower’s difficulties, which may arise from any number of factors, including problems within the respective industry or local economic conditions. Access to collateral, in the event of borrower default, is reasonably assured through adherence to applicable lending laws and through sound lending standards and credit review procedures. Accounting policies for all loans, excluding residential mortgage loans guaranteed by U.S. government agencies, are as follows.

Interest is accrued at the applicable interest rate on the principal amount outstanding. Loans are placed on nonaccruing status when, in the opinion of management, full collection of principal or interest is uncertain. Internally risk graded loans are individually evaluated for nonaccruing status quarterly. Non-risk graded loans are generally placed on nonaccruing status when more than 90 days past due or within 60 days of being notified of the borrower's bankruptcy filing. Interest previously accrued but not collected is charged against interest income when the loan is placed on nonaccruing status. Accrued but not paid interest receivable is included in Receivables in the Consolidated Balance Sheets. Payments on nonaccruing loans are applied to principal or recognized as interest income, according to management’s judgment as to the collectability of principal. Loans may be returned to accruing status when, in the opinion of management, full collection of principal and interest, including principal previously charged off, is probable based on improvements in the borrower’s financial condition or a sustained period of performance.

For loans acquired with no evidence of credit deterioration, discounts are accreted on either an individual basis for loans with unique characteristics or on a pool basis for groups of homogeneous loans. Accretion is discontinued when a loan with an individually attributed discount is placed on nonaccruing status.

Loans to borrowers experiencing financial difficulties may be modified in troubled debt restructurings ("TDRs"). Primarily all TDRs are classified as nonaccruing, excluding loans guaranteed by U.S. government agencies. Modifications generally consist of extension of payment terms or interest rate concessions and may result either voluntarily through negotiations with the borrower or involuntarily through court order. Payment deferrals up to six months are generally considered to be short-term modifications. Generally, principal and accrued but unpaid interest is not voluntarily forgiven.

Performing loans may be renewed under the current collateral value, debt service ratio and other underwriting standards. Nonaccruing loans may be renewed and will remain classified as nonaccruing.

Occasionally, loans, other than residential mortgage loans, may be held for sale in order to manage credit concentration. These loans are carried at the lower of cost or fair value with gains or losses recognized in Other gains (losses), net in the Consolidated Statements of Earnings.

All loans are charged off when the loan balance or a portion of the loan balance is no longer supported by the paying capacity of the borrower or when the required cash flow is reduced in a TDR. The charge-off amount is determined through a quarterly evaluation of available cash resources and collateral value. Internally risk graded loans are evaluated quarterly and charge-offs are taken in the quarter in which the loss is identified. Non-risk graded loans that are past due between 60 days and 180 days, based on the loan product type, are charged off. Loans to borrowers whose personal obligation has been discharged through Chapter 7 bankruptcy proceedings are charged off within 60 days of notice of the bankruptcy filing, regardless of payment status.

Loan origination and commitment fees and direct loan acquisition and origination costs are deferred and amortized as an adjustment to yield over the life of the loan or over the commitment period, as applicable. Amortization does not anticipate loan prepayments. Net unamortized fees are recognized in full at time of payoff.

- 6059 -

Qualifying residential mortgage loans guaranteed by U.S. government agencies have been sold into GNMA pools. Under certain performance conditions specified in government programs, the Company may have the right, but not the obligation to repurchase loans from GNMA pools. These loans no longer qualify for sale accounting and are recognized in the Consolidated Balance Sheets. We do not expect to receive all principal and interest based on the loan's contractual terms. A portion of the principal balance continues to be guaranteed; however, interest accrues at a curtailed rate as specified in the programs. The carrying value of these loans is reduced based on an estimate of the expected cash flows discounted at the original note rate plus a liquidity spread. Guaranteed loans may be modified in TDRs in accordance with U.S. government agency guidelines. Interest continues to accrue based on the modified rate. Guaranteed loans may either be resold into GNMA pools after a performance period specified by the programs or foreclosed and conveyed to the guarantors.

Loans are disaggregated into portfolio segments and further disaggregated into classes. The portfolio segment is the level at which the Company develops and documents a systematic method for determining its allowance for credit losses. Classes are a further disaggregation of portfolio segments based on the risk characteristics of the loans and the Company’s method for monitoring and assessing credit risk.

Portfolio segments of the loan portfolio are as follows (in thousands):


		June 30, 2021								December 31, 2020									September 30, 2021								December 31, 2020
		Fixed Rate		Variable Rate		Non-accrual		Total		Fixed Rate		Variable Rate		Non-accrual		Total			Fixed Rate		Variable Rate		Non-accrual		Total		Fixed Rate		Variable Rate		Non-accrual		Total
Commercial	Commercial	$	3,277,687	$	9,082,616	$	112,604	$	12,472,907	$	3,174,203	$	9,736,173	$	167,159	$	13,077,535	Commercial	$	3,337,034	$	8,757,432	$	80,674	$	12,175,140	$	3,174,203	$	9,736,173	$	167,159	$	13,077,535
Commercial real estate	Commercial real estate	1,028,432		3,192,437		26,123		4,246,992		1,047,486		3,623,806		27,246		4,698,538		Commercial real estate	968,223		3,127,446		21,223		4,116,892		1,047,486		3,623,806		27,246		4,698,538
Paycheck protection program	Paycheck protection program	1,121,583		0		0		1,121,583		1,682,310		0		0		1,682,310		Paycheck protection program	536,052		—		—		536,052		1,682,310		—		—		1,682,310
Loans to individuals	Loans to individuals	2,133,502		1,400,556		40,909		3,574,967		2,174,874		1,333,975		40,288		3,549,137		Loans to individuals	2,086,645		1,393,157		40,050		3,519,852		2,174,874		1,333,975		40,288		3,549,137
Total	Total	$	7,561,204	$	13,675,609	$	179,636	$	21,416,449	$	8,078,873	$	14,693,954	$	234,693	$	23,007,520	Total	$	6,927,954	$	13,278,035	$	141,947	$	20,347,936	$	8,078,873	$	14,693,954	$	234,693	$	23,007,520

Credit Commitments

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. At ~~June~~September 30, 2021, outstanding commitments totaled ~~$11.5~~$12.0 billion. Because some commitments are expected to expire before being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. BOK Financial uses the same credit policies in making commitments as it does loans.

The amount of collateral obtained, if deemed necessary, is based upon management’s credit evaluation of the borrower.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Because the credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan commitments, BOK Financial uses the same credit policies in evaluating the creditworthiness of the customer. Additionally, BOK Financial uses the same evaluation process in obtaining collateral on standby letters of credit as it does for loan commitments. The term of these standby letters of credit is defined in each commitment and typically corresponds with the underlying loan commitment. At ~~June~~September 30, 2021, outstanding standby letters of credit totaled ~~$672~~$638 million.

Allowances for Credit Losses and Accrual for Off-balance Sheet Credit Risk from Unfunded Loans Commitments

The allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments represent the portion of the amortized cost basis of loans that we do not expect to collect over the asset’s contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions. The appropriateness of the allowance for credit losses, including industry and product adjustments, is assessed quarterly by a senior management Allowance Committee. This review is based on an on-going evaluation of the estimated expected credit losses in the portfolio and on unused commitments to provide financing. A well-documented methodology has been developed and is applied by an independent Credit Administration department to assure consistency across the Company.

The allowance for loan losses consists of specific allowances attributed to certain individual loans, generally nonaccruing loans, with dissimilar risk characteristics that have not yet been charged down to amounts we expect to recover and general allowances for estimated credit losses on pools of loans that share similar risk characteristics.

- 6160 -

When full collection of principal or interest is uncertain, the loan’s risk characteristics have changed, and we exclude the loan from the general allowance pool, typically designating it as nonaccruing. For these loans, a specific allowance reflects the expected credit loss.

We measure specific allowances for loans excluded from the general allowance pool by an evaluation of estimated future cash flows discounted at the loan's initial effective interest rate or the fair value of collateral for certain collateral dependent loans. For a non-collateral dependent loan, the specific allowance is the amount by which the loan’s amortized cost basis exceeds its net realizable value. We measure the specific allowance for collateral dependent loans as the amount by which the loan’s amortized cost basis exceeds its fair value. When repayment is expected to be provided substantially through the sale of collateral, we deduct estimated selling costs from the collateral’s fair value. Generally, third party appraisals that conform to Uniform Standards of Professional Appraisal Practice serve as the basis for the fair value of real property held as collateral. These appraised values are on an “as-is” basis and generally are not adjusted by the Company. We obtain updated appraisals at least annually or more frequently if market conditions indicate collateral values may have declined. For energy loans, our internal staff of engineers generally determines collateral value of mineral rights based on projected cash flows from proven oil and gas reserves under existing economic and operating conditions. For real property held as collateral for other loans, third party appraisals that conform to Uniform Standards of Professional Appraisal Practice generally serve as the basis for the fair value. These appraised values are on an “as-is” basis and generally are not adjusted by the Company. We obtain updated appraisals at least annually or more frequently if market conditions indicate collateral values may have declined. Our special assets staff generally determines the value of other collateral based on projected liquidation cash flows under current market conditions. We evaluate collateral values and available cash resources quarterly. Historical statistics may be used to estimate specific allowances in limited situations, such as when a collateral dependent loan is removed from the general allowance pool near the end of a reporting period until an appraisal of collateral value is received or a full assessment of future cash flows is completed.

General allowances estimate expected credit losses on pools of loans sharing similar risk characteristics that are expected to occur over the loan’s estimated remaining life. The loan’s estimated remaining life represents the contractual term adjusted for amortization, estimates of prepayments, and borrower-owned extension options. Approximately 90 percent of the committed dollars in the loan portfolio is risk graded loans with general allowance model inputs that include probability of default, loss given default, and exposure at default. Probability of default is based on the migration of loans from performing to nonperforming using historical life of loan analysis periods. Loss given default is based on the aggregate losses incurred, net of estimated recoveries. Exposure at default represents an estimate of the outstanding amount of credit exposure at the time a default may occur.

Charge-off migration is used to calculate the general allowance for the majority of non-risk graded loans to individuals. The expected credit loss on less than 10 percent of the committed dollars in the portfolio is calculated using charge-off migration.

The expected credit loss on approximately 1 percent of the committed dollars in the portfolio is calculated using a non-modeled approach. Specifically, the calculation applies a long-term net charge-off rate to the loan balances, adjusted for the weighted average remaining maturity of each portfolio.

In estimating the expected credit losses for general allowances on performing risk-graded loans, each portfolio class is assigned relevant economic loss drivers which best explain variations in portfolio net loss rates. The probability of default estimates for each portfolio class are adjusted for current and forecasted economic conditions. The result is applied to the exposure at default and loss given default to calculate the lifetime expected credit loss estimate. Selection of relevant economic loss drivers is re-evaluated periodically and involves statistical analysis as well as management judgment. The unemployment rate factors significantly in the allowance for loan losses calculation, affecting commercial and loans to individuals segments. Other primary factors impacting the commercial portfolio include BBB corporate spreads, real gross domestic product growth rate, and energy commodity prices. The primary commercial real estate variables are vacancy rate and BBB corporate spreads. In addition to the unemployment rate, the forecast for loans to individuals is tied to home price index. The forecasts may include regional economic factors when localized conditions diverge from national conditions.

An Economic Forecast Committee, consisting of senior management with members largely independent of the allowance process develops a twelve-month forward-looking forecast for the relevant economic loss drivers. Management develops these forecasts based on external data as well as a view of future economic conditions, which may include adjustments for regional conditions. The forecast includes three economic scenarios and probability weights for each scenario. The base forecast represents management's view of the most likely outcome, while the downside forecast reflects reasonably possible worsening economic conditions, and the upside forecast projects reasonably possible improving conditions.

- 6261 -

At the end of the one-year reasonable and supportable forecast period, we transition from shorter-term expected losses to long-term loss averages for the loan’s estimated remaining life. The difference between short-term loss forecasts and long-term loss averages is run-off over the reversion horizon, up to three years, depending on the forecasted economic scenarios.

General allowances also consider the estimated impact of factors that are not captured in the modeled results or historical experience. These factors may increase or decrease modeled results by amounts determined by the Allowance Committee. Factors not captured in modeled results or historical experience may include for example, new lines of business, market conditions that have not been previously encountered, observed changes in credit risk that are not yet reflected in macro-economic factors, or economic conditions that impact loss given default assumptions.

The accrual for off-balance sheet credit risk is maintained at a level that is appropriate to cover estimated losses associated with credit instruments that are not currently recognized as assets such as loan commitments, standby letters of credit or guarantees that are not unconditionally cancelable by the bank. This accrual is included in other liabilities in the Consolidated Balance Sheets. The appropriateness of the accrual is determined in the same manner as the allowance for loan losses, with the added consideration of commitment usage over the remaining life for those loans that the bank can not unconditionally cancel.

A provision for credit losses is charged against or credited to earnings in amounts necessary to maintain an appropriate Allowance for Credit Losses. Recoveries of loans previously charged off are added to the allowance when received.

The activity in the allowance for loan losses and the allowance for off-balance sheet credit losses related to loan commitments and standby letters of credit is summarized as follows (in thousands):


		Three Months Ended													Three Months Ended
		June 30, 2021													September 30, 2021
		Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total			Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total
Allowance for loan losses:	Allowance for loan losses:													Allowance for loan losses:
Beginning balance	Beginning balance	$	231,372	$	81,746	$	0	$	39,284	$	0	$	352,402	Beginning balance	$	198,303	$	70,540	$	—	$	43,047	$	—	$	311,890

Provision for loan losses	Provision for loan losses	(18,442)		(10,582)		0		3,960		0		(25,064)		Provision for loan losses	(15,996)		(9,418)		—		(1,981)		—		(27,395)
Loans charged off	Loans charged off	(16,502)		(800)		0		(1,002)		0		(18,304)		Loans charged off	(6,979)		(1,422)		—		(1,183)		—		(9,584)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	1,875		176		0		805		0		2,856		Recoveries of loans previously charged off	832		228		—		709		—		1,769
Ending Balance	Ending Balance	$	198,303	$	70,540	$	0	$	43,047	0		$	311,890	Ending Balance	$	176,160	$	59,928	$	—	$	40,592	—		$	276,680

Allowance for off-balance sheet credit risk from unfunded loan commitments:	Allowance for off-balance sheet credit risk from unfunded loan commitments:													Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	Beginning balance	$	12,736	$	18,298	$	0	$	1,843	$	0	$	32,877	Beginning balance	$	10,094	$	12,348	$	—	$	1,845	$	—	$	24,287

Provision for off-balance sheet credit risk	Provision for off-balance sheet credit risk	(2,642)		(5,950)		0		2		0		(8,590)		Provision for off-balance sheet credit risk	2,772		2,294		—		(114)		—		4,952
Ending Balance	Ending Balance	$	10,094	$	12,348	$	0	$	1,845	$	0	$	24,287	Ending Balance	$	12,866	$	14,642	$	—	$	1,731	$	—	$	29,239

- 62 -


	Nine Months Ended
	September 30, 2021
	Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total
Allowance for loan losses:
Beginning balance	$	254,934	$	86,558	$	—	$	47,148	$	—	$	388,640


Provision for loan losses	(44,331)		(24,579)		—		(5,319)		—		(74,229)
Loans charged off	(38,826)		(2,485)		—		(3,482)		—		(44,793)
Recoveries	4,383		434		—		2,245		—		7,062
Ending balance	$	176,160	$	59,928	$	—	$	40,592	$	—	$	276,680

Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	$	14,422	$	20,571	$	—	$	1,928	$	—	$	36,921
Transition adjustment	—		—		—		—		—		—
Beginning balance, adjusted	14,422		20,571		—		1,928		—		36,921
Provision for off-balance sheet credit losses	(1,556)		(5,929)		—		(197)		—		(7,682)
Ending balance	$	12,866	$	14,642	$	—	$	1,731	$	—	$	29,239


	Three Months Ended
	September 30, 2020
	Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total
Allowance for loan losses:
Beginning balance	$	310,422	$	68,756	$	—	$	56,419	$	—	$	435,597


Provision for loan losses	2,108		3,118		—		1,383		—		6,609
Loans charged off	(25,319)		(413)		—		(929)		—		(26,661)
Recoveries of loans previously charged off	3,066		114		—		1,052		—		4,232
Ending Balance	$	290,277	$	71,575	$	—	$	57,925	—		$	419,777

Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	$	14,582	$	16,419	$	—	$	1,918	$	—	$	32,919
Transition adjustment	—		—		—		—		—		—
Beginning balance, adjusted	14,582		16,419		—		1,918		—		32,919
Provision for off-balance sheet credit risk	(2,618)		(2,426)		—		94		—		(4,950)
Ending Balance	$	11,964	$	13,993	$	—	$	2,012	—		$	27,969

- 63 -

Six Months Ended
June 30, 2021
Commercial Commercial Real Estate Paycheck Protection Program Loans to Individuals Nonspecific Allowance Total
Allowance for loan losses:
Beginning balance $ 254,934 $ 86,558 $ 0 $ 47,148 $ 0 $ 388,640
Provision for loan losses (28,335) (15,161) 0 (3,338) 0 (46,834)
Loans charged off (31,847) (1,063) 0 (2,299) 0 (35,209)
Recoveries 3,551 206 0 1,536 0 5,293
Ending balance $ 198,303 $ 70,540 $ 0 $ 43,047 $ 0 $ 311,890
Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance $ 14,422 $ 20,571 $ 0 $ 1,928 $ 0 $ 36,921
Transition adjustment 0 0 0 0 0 0
Beginning balance, adjusted 14,422 20,571 0 1,928 0 36,921
Provision for off-balance sheet credit losses (4,328) (8,223) 0 (83) 0 (12,634)
Ending balance $ 10,094 $ 12,348 $ 0 $ 1,845 $ 0 $ 24,287

Three Months Ended
June 30, 2020
Commercial Commercial Real Estate Paycheck Protection Program Loans to Individuals Nonspecific Allowance Total
Allowance for loan losses:
Beginning balance $ 213,438 $ 51,461 $ 0 $ 50,412 $ 0 $ 315,311
Provision for loan losses 111,153 17,221 0 5,991 0 134,365
Loans charged off (14,487) (1) 0 (1,082) 0 (15,570)
Recoveries of loans previously charged off 318 75 0 1,098 0 1,491
Ending Balance $ 310,422 $ 68,756 $ 0 $ 56,419 0 $ 435,597
Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance $ 14,040 $ 12,575 $ 0 $ 1,899 $ 0 $ 28,514
Transition adjustment 0 0 0 0 0 0
Beginning balance, adjusted 14,040 12,575 0 1,899 0 28,514
Provision for off-balance sheet credit risk 542 3,844 0 19 0 4,405
Ending Balance $ 14,582 $ 16,419 $ 0 $ 1,918 0 $ 32,919

~~- 64 -~~


		Six Months Ended													Nine Months Ended
		June 30, 2020													September 30, 2020
		Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total			Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Nonspecific Allowance		Total
Allowance for loan losses:	Allowance for loan losses:													Allowance for loan losses:
Beginning balance	Beginning balance	$	118,187	$	51,805	$	0	$	23,572	$	17,195	$	210,759	Beginning balance	$	118,187	$	51,805	$	—	$	23,572	$	17,195	$	210,759
Transition adjustment	Transition adjustment	33,681		(4,620)		0		13,943		(17,195)		25,809		Transition adjustment	33,681		(4,620)		—		13,943		(17,195)		25,809
Beginning balance, adjusted	Beginning balance, adjusted	151,868		47,185		0		37,515		0		236,568		Beginning balance, adjusted	151,868		47,185		—		37,515		—		236,568
Provision for loan losses	Provision for loan losses	188,876		22,336		0		19,117		0		230,329		Provision for loan losses	190,984		25,454		—		20,500		—		236,938
Loans charged off	Loans charged off	(31,102)		(887)		0		(2,498)		0		(34,487)		Loans charged off	(56,421)		(1,300)		—		(3,427)		—		(61,148)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	780		122		0		2,285		0		3,187		Recoveries of loans previously charged off	3,846		236		—		3,337		—		7,419
Ending Balance	Ending Balance	$	310,422	$	68,756	$	0	$	56,419	0		$	435,597	Ending Balance	$	290,277	$	71,575	$	—	$	57,925	—		$	419,777

Allowance for off-balance sheet credit risk from unfunded loan commitments:	Allowance for off-balance sheet credit risk from unfunded loan commitments:													Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	Beginning balance	$	1,434	$	107	$	0	$	44	$	0	$	1,585	Beginning balance	$	1,434	$	107	$	—	$	44	$	—	$	1,585
Transition adjustment	Transition adjustment	10,144		11,660		0		1,748		0		23,552		Transition adjustment	10,144		11,660		—		1,748		—		23,552
Beginning balance, adjusted	Beginning balance, adjusted	11,578		11,767		0		1,792		0		25,137		Beginning balance, adjusted	11,578		11,767		—		1,792		—		25,137
Provision for off-balance sheet credit risk	Provision for off-balance sheet credit risk	3,004		4,652		0		126		0		7,782		Provision for off-balance sheet credit risk	386		2,226		—		220		—		2,832
Ending Balance	Ending Balance	$	14,582	$	16,419	$	0	$	1,918	0		$	32,919	Ending Balance	$	11,964	$	13,993	$	—	$	2,012	—		$	27,969

Changes in our reasonable and supportable forecasts of macroeconomic variables, primarily due to ~~the anticipated impact of the on-going COVID-19 pandemic,~~continued strength in commodity prices and ~~other assumptions,~~a continued optimistic outlook for economic growth in GDP and labor markets resulted in a ~~$34.2~~$12.3 million negative provision for credit losses related to lending activities during the ~~second~~third quarter of 2021. Changes in the loan portfolio characteristics, including specific impairment and losses, loan balances, risk grading and changes in payment profile resulted in a ~~$579 thousand~~$10.1 million negative provision for credit losses related to lending activities.

The allowance for loan losses and recorded investment of the related loans by portfolio segment for each measurement method at ~~June~~September 30, 2021 is as follows (in thousands):


		Collectively Measured for General Allowances				Individually Measured for Specific Allowances				Total					Collectively Measured for General Allowances				Individually Measured for Specific Allowances				Total
		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance			Recorded Investment		Related Allowance		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance
Commercial	Commercial	$	12,360,303	$	188,227	$	112,604	$	10,076	$	12,472,907	$	198,303	Commercial	$	12,094,466	$	168,325	$	80,674	$	7,835	$	12,175,140	$	176,160
Commercial real estate	Commercial real estate	4,220,869		66,841		26,123		3,699		4,246,992		70,540		Commercial real estate	4,095,669		57,579		21,223		2,349		4,116,892		59,928
Paycheck protection program	Paycheck protection program	1,121,583		0		0		0		1,121,583		0		Paycheck protection program	536,052		—		—		—		536,052		—
Loans to individuals	Loans to individuals	3,534,058		43,047		40,909		0		3,574,967		43,047		Loans to individuals	3,479,802		40,592		40,050		—		3,519,852		40,592
Total	Total	$	21,236,813	$	298,115	$	179,636	$	13,775	$	21,416,449	$	311,890	Total	$	20,205,989	$	266,496	$	141,947	$	10,184	$	20,347,936	$	276,680

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The allowance for loan losses and recorded investment of the related loans by portfolio segment for each measurement method at December 31, 2020 is as follows (in thousands):


		Collectively Measured for General Allowances				Individually Measured for Specific Allowances				Total					Collectively Measured for General Allowances				Individually Measured for Specific Allowances				Total
		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance			Recorded Investment		Related Allowance		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance
Commercial	Commercial	$	12,910,376	$	235,882	$	167,159	$	19,052	$	13,077,535	$	254,934	Commercial	$	12,910,376	$	235,882	$	167,159	$	19,052	$	13,077,535	$	254,934
Commercial real estate	Commercial real estate	4,671,292		83,169		27,246		3,389		4,698,538		86,558		Commercial real estate	4,671,292		83,169		27,246		3,389		4,698,538		86,558
Paycheck protection program	Paycheck protection program	1,682,310		0		0		0		1,682,310		0		Paycheck protection program	1,682,310		—		—		—		1,682,310		—
Loans to individuals	Loans to individuals	3,508,849		47,148		40,288		0		3,549,137		47,148		Loans to individuals	3,508,849		47,148		40,288		—		3,549,137		47,148
Total	Total	$	22,772,827	$	366,199	$	234,693	$	22,441	$	23,007,520	$	388,640	Total	$	22,772,827	$	366,199	$	234,693	$	22,441	$	23,007,520	$	388,640

Credit Quality Indicators

The Company utilizes risk grading as primary credit quality indicators as it influences the probability of default which is a key attribute in the expected credit losses calculation. Substantially all commercial as well as commercial real estate loans and certain loans to individuals are risk graded based on a quarterly evaluation of the borrowers’ ability to repay the loans. Certain commercial loans and most loans to individuals are small, homogeneous pools that are not risk-graded. The credit quality of these loans is based on past due days in accordance with regulatory guidelines.

We have included in the credit quality indicator “pass” loans that are in compliance with the original terms of the agreement and currently exhibit no factors that cause management to have doubts about the borrowers’ ability to remain in compliance with the original terms of the agreement, which is consistent with the regulatory guideline of “pass.” This also includes past due residential mortgages that are guaranteed by agencies of the U.S. government that continue to accrue interest based on criteria of the guarantors’ programs.

Other loans especially mentioned ("Special Mention") are currently performing in compliance with the original terms of the agreement but may have a potential weakness that deserves management’s close attention, consistent with regulatory guidelines. Non-graded loans 30 to 59 days past due are categorized as Special Mention.

The risk grading process identified certain loans that have a well-defined weakness (for example, inadequate debt service coverage or liquidity or marginal capitalization; repayment may depend on collateral or other risk mitigation) that may jeopardize liquidation of the debt and represent a greater risk due to deterioration in the financial condition of the borrower. This is consistent with the regulatory guideline for “substandard.” Because the borrowers are still performing in accordance with the original terms of the loan agreements, these loans remain on accruing status. Non-graded loans 60 to 89 days past due are categorized as Accruing Substandard.

Nonaccruing loans represent loans for which full collection of principal and interest is uncertain. This includes certain loans considered “substandard” and all loans considered “doubtful” by regulatory guidelines. Non-graded loans 90 or more days past due are categorized as Nonaccrual.

Probability of default is lowest for pass graded loans and increases for each credit quality indicator, Special Mention, and Accruing Substandard.

Vintage represents the year of origination, except for revolving loans which are considered in aggregate. Loans that were once revolving but have converted to term loans without additional underwriting appear in a separate vintage column.

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The following table summarizes the Company’s loan portfolio at ~~June~~September 30, 2021 by the risk grade categories and vintage (in thousands):


		Origination Year																			Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial:	Commercial:																			Commercial:
Energy	Energy																			Energy
Pass	Pass	$	72,827	$	57,881	$	37,638	$	72,773	$	5,221	$	8,948	$	2,431,488	$	0	$	2,686,776	Pass	$	154,735	$	38,019	$	33,135	$	14,559	$	4,987	$	19,327	$	2,306,845	$	—	$	2,571,607
Special Mention	Special Mention	0		0		0		0		0		0		21,947		0		21,947		Special Mention	565		1,607		—		—		—		—		750		—		2,922
Accruing Substandard	Accruing Substandard	0		24,000		1,275		1,219		0		10,843		194,930		0		232,267		Accruing Substandard	—		23,065		1,230		1,100		—		6		168,629		—		194,030
Nonaccrual	Nonaccrual	0		20,911		2,404		0		0		11,238		35,788		0		70,341		Nonaccrual	—		20,722		1,570		—		—		9,409		13,799		—		45,500
Total energy	Total energy	72,827		102,792		41,317		73,992		5,221		31,029		2,684,153		0		3,011,331		Total energy	155,300		83,413		35,935		15,659		4,987		28,742		2,490,023		—		2,814,059

Healthcare	Healthcare																			Healthcare
Pass	Pass	296,227		569,385		613,579		569,118		380,741		756,261		149,129		0		3,334,440		Pass	383,462		593,123		576,153		521,156		329,791		720,489		149,119		—		3,273,293
Special Mention	Special Mention	0		0		0		6,646		0		346		4		0		6,996		Special Mention	6,883		—		15,746		—		5,834		—		5		—		28,468
Accruing Substandard	Accruing Substandard	0		0		27,444		871		0		10,983		0		0		39,298		Accruing Substandard	—		—		27,292		7,304		—		10,775		—		—		45,371
Nonaccrual	Nonaccrual	0		0		18		0		0		0		509		0		527		Nonaccrual	—		—		—		—		—		—		509		—		509
Total healthcare	Total healthcare	296,227		569,385		641,041		576,635		380,741		767,590		149,642		0		3,381,261		Total healthcare	390,345		593,123		619,191		528,460		335,625		731,264		149,633		—		3,347,641

Services	Services																			Services
Pass	Pass	334,227		521,732		363,415		322,526		271,369		921,002		537,942		550		3,272,763		Pass	430,099		501,607		334,009		298,665		240,892		847,065		584,197		415		3,236,949
Special Mention	Special Mention	222		126		1,752		90		3,279		11,247		1,370		0		18,086		Special Mention	453		412		2,779		49		3,318		11,085		2,027		203		20,326
Accruing Substandard	Accruing Substandard	39		412		10,869		16,505		1,891		9,053		30,225		0		68,994		Accruing Substandard	26		76		10,575		16,418		1,839		5,603		5,896		—		40,433
Nonaccrual	Nonaccrual	0		4,631		447		758		16,950		6,445		682		0		29,913		Nonaccrual	—		4,529		—		230		14,220		6,232		503		—		25,714
Total services	Total services	334,488		526,901		376,483		339,879		293,489		947,747		570,219		550		3,389,756		Total services	430,578		506,624		347,363		315,362		260,269		869,985		592,623		618		3,323,422

General business	General business																			General business
Pass	Pass	318,504		313,185		332,890		221,590		197,124		267,409		975,933		2,081		2,628,716		Pass	457,490		246,333		295,089		212,899		188,407		230,442		1,002,036		2,025		2,634,721
Special Mention	Special Mention	818		259		2,719		134		4,010		1,026		7,275		0		16,241		Special Mention	232		1,380		66		1,469		3,937		318		8,697		—		16,099
Accruing Substandard	Accruing Substandard	0		2,088		2,802		9,119		8,628		7,329		3,705		108		33,779		Accruing Substandard	365		1,230		2,458		7,961		8,694		6,906		2,633		—		30,247
Nonaccrual	Nonaccrual	0		1,659		1,790		5,834		1,417		547		547		29		11,823		Nonaccrual	—		1,582		4,235		1,240		770		531		462		131		8,951
Total general business	Total general business	319,322		317,191		340,201		236,677		211,179		276,311		987,460		2,218		2,690,559		Total general business	458,087		250,525		301,848		223,569		201,808		238,197		1,013,828		2,156		2,690,018

Total commercial	Total commercial	1,022,864		1,516,269		1,399,042		1,227,183		890,630		2,022,677		4,391,474		2,768		12,472,907		Total commercial	1,434,310		1,433,685		1,304,337		1,083,050		802,689		1,868,188		4,246,107		2,774		12,175,140

Commercial real estate:	Commercial real estate:																			Commercial real estate:
Pass	Pass	193,724		796,606		1,169,633		590,116		362,500		923,860		151,418		36		4,187,893		Pass	374,519		805,102		1,104,404		466,778		336,206		822,068		140,050		33		4,049,160
Special Mention	Special Mention	0		0		0		3,184		14,052		6,830		0		0		24,066		Special Mention	—		—		—		6,683		10,943		6,760		—		—		24,386
Accruing Substandard	Accruing Substandard	0		0		0		0		4,467		4,416		27		0		8,910		Accruing Substandard	—		—		—		13,288		4,480		4,355		—		—		22,123
Nonaccrual	Nonaccrual	0		0		8,300		0		0		17,823		0		0		26,123		Nonaccrual	—		—		8,244		—		—		12,979		—		—		21,223
Total commercial real estate	Total commercial real estate	193,724		796,606		1,177,933		593,300		381,019		952,929		151,445		36		4,246,992		Total commercial real estate	374,519		805,102		1,112,648		486,749		351,629		846,162		140,050		33		4,116,892

- 6766 -


		Origination Year																			Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Paycheck protection program:	Paycheck protection program:																			Paycheck protection program:
Pass	Pass	660,775		460,808		0		0		0		0		0		0		1,121,583		Pass	450,844		85,208		—		—		—		—		—		—		536,052
Total paycheck protection program	Total paycheck protection program	660,775		460,808		0		0		0		0		0		0		1,121,583		Total paycheck protection program	450,844		85,208		—		—		—		—		—		—		536,052
Loans to individuals:	Loans to individuals:																			Loans to individuals:
Residential mortgage	Residential mortgage																			Residential mortgage
Pass	Pass	231,814		516,761		106,498		86,327		84,853		370,185		318,569		24,610		1,739,617		Pass	325,951		478,460		93,556		67,648		80,208		333,932		313,255		22,305		1,715,315
Special Mention	Special Mention	249		0		0		26		0		239		218		10		742		Special Mention	—		—		82		13		—		283		248		—		626
Accruing Substandard	Accruing Substandard	0		0		117		0		0		121		545		12		795		Accruing Substandard	—		—		—		—		—		126		479		23		628
Nonaccrual	Nonaccrual	0		627		241		1,049		675		25,754		2,213		914		31,473		Nonaccrual	758		1,446		341		1,051		688		23,457		2,097		836		30,674
Total residential mortgage	Total residential mortgage	232,063		517,388		106,856		87,402		85,528		396,299		321,545		25,546		1,772,627		Total residential mortgage	326,709		479,906		93,979		68,712		80,896		357,798		316,079		23,164		1,747,243

Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies																			Residential mortgage guaranteed by U.S. government agencies
Pass	Pass	349		9,236		29,888		35,932		42,705		286,489		0		0		404,599		Pass	348		10,308		24,350		30,941		35,341		266,510		—		—		367,798

Nonaccrual	Nonaccrual	0		0		82		404		143		8,578		0		0		9,207		Nonaccrual	—		—		82		244		143		8,719		—		—		9,188
Total residential mortgage guaranteed by U.S. government agencies	Total residential mortgage guaranteed by U.S. government agencies	349		9,236		29,970		36,336		42,848		295,067		0		0		413,806		Total residential mortgage guaranteed by U.S. government agencies	348		10,308		24,432		31,185		35,484		275,229		—		—		376,986

Personal:	Personal:																			Personal:
Pass	Pass	114,228		203,538		190,723		71,862		98,950		144,502		562,863		1,002		1,387,668		Pass	154,436		199,604		183,461		69,075		97,119		136,837		553,702		887		1,395,121
Special Mention	Special Mention	63		96		0		9		2		45		0		0		215		Special Mention	14		15		23		10		—		45		5		—		112
Accruing Substandard	Accruing Substandard	0		0		175		20		0		227		0		0		422		Accruing Substandard	—		—		180		1		—		—		21		—		202
Nonaccrual	Nonaccrual	0		1		31		42		53		76		26		0		229		Nonaccrual	19		9		10		25		38		61		26		—		188
Total personal	Total personal	114,291		203,635		190,929		71,933		99,005		144,850		562,889		1,002		1,388,534		Total personal	154,469		199,628		183,674		69,111		97,157		136,943		553,754		887		1,395,623

Total loans to individuals	Total loans to individuals	346,703		730,259		327,755		195,671		227,381		836,216		884,434		26,548		3,574,967		Total loans to individuals	481,526		689,842		302,085		169,008		213,537		769,970		869,833		24,051		3,519,852
Total loans	Total loans	$	2,224,066	$	3,503,942	$	2,904,730	$	2,016,154	$	1,499,030	$	3,811,822	$	5,427,353	$	29,352	$	21,416,449	Total loans	$	2,741,199	$	3,013,837	$	2,719,070	$	1,738,807	$	1,367,855	$	3,484,320	$	5,255,990	$	26,858	$	20,347,936

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The following table summarizes the Company’s loan portfolio at December 31, 2020 by the risk grade categories and vintage (in thousands):


		Origination Year																			Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial:	Commercial:																			Commercial:
Energy	Energy																			Energy
Pass	Pass	$	112,614	$	51,863	$	89,346	$	7,178	$	1,148	$	7,956	$	2,548,663	$	0	$	2,818,768	Pass	$	112,614	$	51,863	$	89,346	$	7,178	$	1,148	$	7,956	$	2,548,663	$	—	$	2,818,768
Special Mention	Special Mention	0		0		0		0		0		0		202,590		0		202,590		Special Mention	—		—		—		—		—		—		202,590		—		202,590
Accruing Substandard	Accruing Substandard	24,000		1,363		1,453		0		12,667		0		283,294		0		322,777		Accruing Substandard	24,000		1,363		1,453		—		12,667		—		283,294		—		322,777
Nonaccrual	Nonaccrual	21,076		2,607		0		0		0		21,064		80,312		0		125,059		Nonaccrual	21,076		2,607		—		—		—		21,064		80,312		—		125,059
Total energy	Total energy	157,690		55,833		90,799		7,178		13,815		29,020		3,114,859		0		3,469,194		Total energy	157,690		55,833		90,799		7,178		13,815		29,020		3,114,859		—		3,469,194

Healthcare	Healthcare																			Healthcare
Pass	Pass	536,745		615,221		638,302		422,834		234,399		658,286		147,132		0		3,252,919		Pass	536,745		615,221		638,302		422,834		234,399		658,286		147,132		—		3,252,919
Special Mention	Special Mention	0		27,500		0		0		0		8,282		5		0		35,787		Special Mention	—		27,500		—		—		—		8,282		5		—		35,787
Accruing Substandard	Accruing Substandard	0		0		1,191		929		132		11,387		0		0		13,639		Accruing Substandard	—		—		1,191		929		132		11,387		—		—		13,639
Nonaccrual	Nonaccrual	0		18		183		0		0		2,935		509		0		3,645		Nonaccrual	—		18		183		—		—		2,935		509		—		3,645
Total healthcare	Total healthcare	536,745		642,739		639,676		423,763		234,531		680,890		147,646		0		3,305,990		Total healthcare	536,745		642,739		639,676		423,763		234,531		680,890		147,646		—		3,305,990

Services	Services																			Services
Pass	Pass	534,853		436,384		372,867		307,374		373,785		683,936		665,491		682		3,375,372		Pass	534,853		436,384		372,867		307,374		373,785		683,936		665,491		682		3,375,372
Special Mention	Special Mention	150		9,057		389		291		2,038		2,000		3,063		0		16,988		Special Mention	150		9,057		389		291		2,038		2,000		3,063		—		16,988
Accruing Substandard	Accruing Substandard	429		6,380		26,008		6,027		5,030		7,954		38,797		0		90,625		Accruing Substandard	429		6,380		26,008		6,027		5,030		7,954		38,797		—		90,625
Nonaccrual	Nonaccrual	4,833		448		0		12,590		1,049		6,138		540		0		25,598		Nonaccrual	4,833		448		—		12,590		1,049		6,138		540		—		25,598
Total services	Total services	540,265		452,269		399,264		326,282		381,902		700,028		707,891		682		3,508,583		Total services	540,265		452,269		399,264		326,282		381,902		700,028		707,891		682		3,508,583

General business	General business																			General business
Pass	Pass	419,756		394,985		310,273		236,222		103,987		186,600		1,055,878		2,316		2,710,017		Pass	419,756		394,985		310,273		236,222		103,987		186,600		1,055,878		2,316		2,710,017
Special Mention	Special Mention	197		4,519		9,713		7,803		2,511		3,159		2,483		19		30,404		Special Mention	197		4,519		9,713		7,803		2,511		3,159		2,483		19		30,404
Accruing Substandard	Accruing Substandard	1,432		3,069		6,694		10,935		10,042		3,729		4,449		140		40,490		Accruing Substandard	1,432		3,069		6,694		10,935		10,042		3,729		4,449		140		40,490
Nonaccrual	Nonaccrual	1,675		3,728		4,863		1,436		530		107		477		41		12,857		Nonaccrual	1,675		3,728		4,863		1,436		530		107		477		41		12,857
Total general business	Total general business	423,060		406,301		331,543		256,396		117,070		193,595		1,063,287		2,516		2,793,768		Total general business	423,060		406,301		331,543		256,396		117,070		193,595		1,063,287		2,516		2,793,768

Total commercial	Total commercial	1,657,760		1,557,142		1,461,282		1,013,619		747,318		1,603,533		5,033,683		3,198		13,077,535		Total commercial	1,657,760		1,557,142		1,461,282		1,013,619		747,318		1,603,533		5,033,683		3,198		13,077,535

Commercial real estate:	Commercial real estate:																			Commercial real estate:
Pass	Pass	725,577		1,211,338		954,226		489,193		314,899		722,475		223,131		38		4,640,877		Pass	725,577		1,211,338		954,226		489,193		314,899		722,475		223,131		38		4,640,877
Special Mention	Special Mention	0		0		259		12,311		2,725		5,831		0		0		21,126		Special Mention	—		—		259		12,311		2,725		5,831		—		—		21,126
Accruing Substandard	Accruing Substandard	0		0		0		4,410		0		4,852		27		0		9,289		Accruing Substandard	—		—		—		4,410		—		4,852		27		—		9,289
Nonaccrual	Nonaccrual	0		8,300		0		232		7,468		11,246		0		0		27,246		Nonaccrual	—		8,300		—		232		7,468		11,246		—		—		27,246
Total commercial real estate	Total commercial real estate	725,577		1,219,638		954,485		506,146		325,092		744,404		223,158		38		4,698,538		Total commercial real estate	725,577		1,219,638		954,485		506,146		325,092		744,404		223,158		38		4,698,538

- 6968 -


		Origination Year																			Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Paycheck protection program:	Paycheck protection program:																			Paycheck protection program:
Pass	Pass	1,682,310		0		0		0		0		0		0		0		1,682,310		Pass	1,682,310		—		—		—		—		—		—		—		1,682,310
Total paycheck protection program	Total paycheck protection program	1,682,310		0		0		0		0		0		0		0		1,682,310		Total paycheck protection program	1,682,310		—		—		—		—		—		—		—		1,682,310
Loans to individuals:	Loans to individuals:																			Loans to individuals:
Residential mortgage	Residential mortgage																			Residential mortgage
Pass	Pass	564,325		149,832		120,875		124,930		158,801		348,292		335,259		24,553		1,826,867		Pass	564,325		149,832		120,875		124,930		158,801		348,292		335,259		24,553		1,826,867
Special Mention	Special Mention	33		11		2,094		0		59		318		950		10		3,475		Special Mention	33		11		2,094		—		59		318		950		10		3,475
Accruing Substandard	Accruing Substandard	0		0		51		0		0		34		272		76		433		Accruing Substandard	—		—		51		—		—		34		272		76		433
Nonaccrual	Nonaccrual	648		104		1,658		784		2,010		22,415		3,835		774		32,228		Nonaccrual	648		104		1,658		784		2,010		22,415		3,835		774		32,228
Total residential mortgage	Total residential mortgage	565,006		149,947		124,678		125,714		160,870		371,059		340,316		25,413		1,863,003		Total residential mortgage	565,006		149,947		124,678		125,714		160,870		371,059		340,316		25,413		1,863,003

Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies																			Residential mortgage guaranteed by U.S. government agencies
Pass	Pass	4,859		33,880		34,464		43,099		58,264		226,380		0		0		400,946		Pass	4,859		33,880		34,464		43,099		58,264		226,380		—		—		400,946

Nonaccrual	Nonaccrual	0		0		545		0		309		6,887		0		0		7,741		Nonaccrual	—		—		545		—		309		6,887		—		—		7,741
Total residential mortgage guaranteed by U.S. government agencies	Total residential mortgage guaranteed by U.S. government agencies	4,859		33,880		35,009		43,099		58,573		233,267		0		0		408,687		Total residential mortgage guaranteed by U.S. government agencies	4,859		33,880		35,009		43,099		58,573		233,267		—		—		408,687

Personal:	Personal:																			Personal:
Pass	Pass	219,873		200,580		76,246		100,229		64,104		102,126		510,571		1,510		1,275,239		Pass	219,873		200,580		76,246		100,229		64,104		102,126		510,571		1,510		1,275,239
Special Mention	Special Mention	39		55		66		0		469		31		965		0		1,625		Special Mention	39		55		66		—		469		31		965		—		1,625
Accruing Substandard	Accruing Substandard	11		214		10		0		0		0		29		0		264		Accruing Substandard	11		214		10		—		—		—		29		—		264
Nonaccrual	Nonaccrual	28		17		57		73		50		49		45		0		319		Nonaccrual	28		17		57		73		50		49		45		—		319
Total personal	Total personal	219,951		200,866		76,379		100,302		64,623		102,206		511,610		1,510		1,277,447		Total personal	219,951		200,866		76,379		100,302		64,623		102,206		511,610		1,510		1,277,447

Total loans to individuals	Total loans to individuals	789,816		384,693		236,066		269,115		284,066		706,532		851,926		26,923		3,549,137		Total loans to individuals	789,816		384,693		236,066		269,115		284,066		706,532		851,926		26,923		3,549,137
Total loans	Total loans	$	4,855,463	$	3,161,473	$	2,651,833	$	1,788,880	$	1,356,476	$	3,054,469	$	6,108,767	$	30,159	$	23,007,520	Total loans	$	4,855,463	$	3,161,473	$	2,651,833	$	1,788,880	$	1,356,476	$	3,054,469	$	6,108,767	$	30,159	$	23,007,520

- 7069 -

Nonaccruing Loans

A summary of nonaccruing loans at ~~June~~September 30, 2021 follows (in thousands):


		As of June 30, 2021									As of September 30, 2021
		Total		With No Allowance		With Allowance		Related Allowance			Total		With No Allowance		With Allowance		Related Allowance
Commercial:	Commercial:									Commercial:
Energy	Energy	$	70,341	$	70,341	$	0	$	0	Energy	$	45,500	$	40,998	$	4,502	$	2,417
Healthcare	Healthcare	527		527		0		0		Healthcare	509		509		—		—
Services	Services	29,913		21,484		8,429		5,234		Services	25,714		18,512		7,202		4,918
General business	General business	11,823		6,981		4,842		4,842		General business	8,951		5,526		3,425		500
Total commercial	Total commercial	112,604		99,333		13,271		10,076		Total commercial	80,674		65,545		15,129		7,835

Commercial real estate	Commercial real estate	26,123		13,388		12,735		3,699		Commercial real estate	21,223		12,979		8,244		2,349

Loans to individuals:	Loans to individuals:									Loans to individuals:
Residential mortgage	Residential mortgage	31,473		31,473		0		0		Residential mortgage	30,674		30,674		—		—
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	9,207		9,207		0		0		Residential mortgage guaranteed by U.S. government agencies	9,188		9,188		—		—
Personal	Personal	229		229		0		0		Personal	188		188		—		—
Total loans to individuals	Total loans to individuals	40,909		40,909		0		0		Total loans to individuals	40,050		40,050		—		—

Total	Total	$	179,636	$	153,630	$	26,006	$	13,775	Total	$	141,947	$	118,574	$	23,373	$	10,184

A summary of nonaccruing loans at December 31, 2020 follows (in thousands):


		As of December 31, 2020									As of December 31, 2020
		Total		With No Allowance		With Allowance		Related Allowance			Total		With No Allowance		With Allowance		Related Allowance
Commercial:	Commercial:									Commercial:
Energy	Energy	$	125,059	$	76,633	$	48,426	$	16,478	Energy	$	125,059	$	76,633	$	48,426	$	16,478
Healthcare	Healthcare	3,645		3,645		0		0		Healthcare	3,645		3,645		—		—
Services	Services	25,598		20,810		4,788		2,574		Services	25,598		20,810		4,788		2,574
General business	General business	12,857		12,857		0		0		General business	12,857		12,857		—		—
Total commercial	Total commercial	167,159		113,945		53,214		19,052		Total commercial	167,159		113,945		53,214		19,052

Commercial real estate	Commercial real estate	27,246		13,645		13,601		3,389		Commercial real estate	27,246		13,645		13,601		3,389

Loans to individuals:	Loans to individuals:									Loans to individuals:
Residential mortgage	Residential mortgage	32,228		32,228		0		0		Residential mortgage	32,228		32,228		—		—
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	7,741		7,741		0		0		Residential mortgage guaranteed by U.S. government agencies	7,741		7,741		—		—
Personal	Personal	319		319		0		0		Personal	319		319		—		—
Total loans to individuals	Total loans to individuals	40,288		40,288		0		0		Total loans to individuals	40,288		40,288		—		—

Total	Total	$	234,693	$	167,878	$	66,815	$	22,441	Total	$	234,693	$	167,878	$	66,815	$	22,441

- 7170 -

Troubled Debt Restructurings

At ~~June~~September 30, 2021 the Company had ~~$234~~$241 million in troubled debt restructurings ("TDRs"), of which ~~$171~~$179 million were accruing residential mortgage loans guaranteed by U.S. government agencies, $16 million were nonaccruing residential mortgage loans with 0no specific allowance necessary and ~~$15~~$14 million were commercial real estate loans with a related specific allowance of $2.3 million. Approximately ~~$131~~$133 million of TDRs were performing in accordance with the modified terms.

At December 31, 2020, the Company had $187 million in TDRs, of which $152 million were accruing residential mortgage loans guaranteed by U.S. government agencies. Approximately $95 million of TDRs were performing in accordance with the modified terms.

TDRs generally consist of interest rate concessions, payment stream concessions or a combination of concessions to distressed borrowers. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, ~~$55~~$18 million and ~~$66~~$81 million of loans were restructured and ~~$35~~$712 thousand and ~~$311~~$994 thousand of loans designated as TDRs were charged off. During the three and ~~six~~nine months ended ~~June~~September 30, 2020, ~~$35~~$36 million and ~~$59~~$76 million of loans were restructured and ~~$7.7~~$6.4 million and ~~$9.7~~$16.1 million of loans designated as TDRs were charged off.

Past Due Loans

Past due status for all loan classes is based on the actual number of days since the last payment was due according to the contractual terms of the loans, as modified for short-term payment deferral forbearance.

A summary of loans currently performing and past due as of ~~June~~September 30, 2021 is as follows (in thousands):


				Past Due								Past Due 90 Days or More and Accruing					Past Due								Past Due 90 Days or More and Accruing
		Current		30 to 59 Days		60 to 89 Days		90 Days or More		Total					Current		30 to 59 Days		60 to 89 Days		90 Days or More		Total
Commercial:	Commercial:													Commercial:
Energy	Energy	$	2,993,105	$	0	$	0	$	18,226	$	3,011,331	$	0	Energy	$	2,803,488	$	—	$	—	$	10,571	$	2,814,059	$	—
Healthcare	Healthcare	3,380,557		0		177		527		3,381,261		0		Healthcare	3,346,740		404		—		497		3,347,641		—
Services	Services	3,377,109		336		0		12,311		3,389,756		212		Services	3,309,658		3,092		1,648		9,024		3,323,422		—
General business	General business	2,683,645		915		292		5,707		2,690,559		0		General business	2,678,878		1,732		1,821		7,587		2,690,018		200
Total commercial	Total commercial	12,434,416		1,251		469		36,771		12,472,907		212		Total commercial	12,138,764		5,228		3,469		27,679		12,175,140		200

Commercial real estate	Commercial real estate	4,236,417		1,604		39		8,932		4,246,992		0		Commercial real estate	4,105,791		1,505		—		9,596		4,116,892		—

Paycheck protection program	Paycheck protection program	1,121,583		0		0		0		1,121,583		0		Paycheck protection program	536,052		—		—		—		536,052		—

Loans to individuals:	Loans to individuals:													Loans to individuals:
Residential mortgage	Residential mortgage	1,757,711		4,780		898		9,238		1,772,627		0		Residential mortgage	1,731,942		6,147		2,269		6,885		1,747,243		23
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	259,023		41,355		18,265		95,163		413,806		89,121		Residential mortgage guaranteed by U.S. government agencies	204,901		35,894		18,028		118,163		376,986		111,835
Personal	Personal	1,388,201		176		30		127		1,388,534		40		Personal	1,395,445		74		37		67		1,395,623		—
Total loans to individuals	Total loans to individuals	3,404,935		46,311		19,193		104,528		3,574,967		89,161		Total loans to individuals	3,332,288		42,115		20,334		125,115		3,519,852		111,858

Total	Total	$	21,197,351	$	49,166	$	19,701	$	150,231	$	21,416,449	$	89,373	Total	$	20,112,895	$	48,848	$	23,803	$	162,390	$	20,347,936	$	112,058

- 7271 -

A summary of loans currently performing and past due as of December 31, 2020 is as follows (in thousands):


				Past Due								Past Due 90 Days or More and Accruing					Past Due								Past Due 90 Days or More and Accruing
		Current		30 to 59 Days		60 to 89 Days		90 Days or More		Total					Current		30 to 59 Days		60 to 89 Days		90 Days or More		Total
Commercial:	Commercial:													Commercial:
Energy	Energy	$	3,410,995	$	12,735	$	4,050	$	41,414	$	3,469,194	$	0	Energy	$	3,410,995	$	12,735	$	4,050	$	41,414	$	3,469,194	$	—
Healthcare	Healthcare	3,302,345		0		0		3,645		3,305,990		0		Healthcare	3,302,345		—		—		3,645		3,305,990		—
Services	Services	3,489,423		3,278		177		15,705		3,508,583		326		Services	3,489,423		3,278		177		15,705		3,508,583		326
General business	General business	2,776,038		1,206		6,277		10,247		2,793,768		4,495		General business	2,776,038		1,206		6,277		10,247		2,793,768		4,495
Total commercial	Total commercial	12,978,801		17,219		10,504		71,011		13,077,535		4,821		Total commercial	12,978,801		17,219		10,504		71,011		13,077,535		4,821

Commercial real estate	Commercial real estate	4,672,279		276		5,310		20,673		4,698,538		5,126		Commercial real estate	4,672,279		276		5,310		20,673		4,698,538		5,126

Paycheck protection program	Paycheck protection program	1,682,310		0		0		0		1,682,310		0		Paycheck protection program	1,682,310		—		—		—		1,682,310		—

Loans to individuals:	Loans to individuals:													Loans to individuals:
Residential mortgage	Residential mortgage	1,849,304		5,812		837		7,050		1,863,003		181		Residential mortgage	1,849,304		5,812		837		7,050		1,863,003		181
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	262,102		41,389		22,041		83,155		408,687		78,349		Residential mortgage guaranteed by U.S. government agencies	262,102		41,389		22,041		83,155		408,687		78,349
Personal	Personal	1,273,702		3,317		90		338		1,277,447		241		Personal	1,273,702		3,317		90		338		1,277,447		241
Total loans to individuals	Total loans to individuals	3,385,108		50,518		22,968		90,543		3,549,137		78,771		Total loans to individuals	3,385,108		50,518		22,968		90,543		3,549,137		78,771

Total	Total	$	22,718,498	$	68,013	$	38,782	$	182,227	$	23,007,520	$	88,718	Total	$	22,718,498	$	68,013	$	38,782	$	182,227	$	23,007,520	$	88,718

- 7372 -

(5) Mortgage Banking Activities

Residential Mortgage Loan Production

The Company originates, markets and services conventional and government-sponsored residential mortgage loans. Generally, conforming fixed rate residential mortgage loans are held for sale in the secondary market and non-conforming and adjustable-rate residential mortgage loans are retained for investment. Residential mortgage loans originated for sale by the Company are carried at fair value based on sales commitments and market quotes. Changes in the fair value of mortgage loans held for sale are included in Other operating revenue – Mortgage banking revenue. Residential mortgage loans held for sale also includes the fair value of residential mortgage loan commitments and forward sales commitments, which are considered derivative contracts that have not been designated as hedging instruments for accounting purposes. The volume of mortgage loans originated for sale and secondary market prices are the primary drivers of originating and marketing revenue.

Residential mortgage loan commitments are generally outstanding for 60 to 90 days, which represents the typical period from commitment to originate a residential mortgage loan to when the closed loan is sold to an investor. Residential mortgage loan commitments are subject to both credit and interest rate risk. Credit risk is managed through underwriting policies and procedures, including collateral requirements, which are generally accepted by the secondary loan markets. Exposure to interest rate fluctuations is partially managed through forward sales of residential mortgage-backed securities and forward sales contracts. These latter contracts set the price for loans that will be delivered in the next 60 to 90 days.

The unpaid principal balance of residential mortgage loans held for sale, notional amounts of derivative contracts related to residential mortgage loan commitments and forward contract sales and their related fair values included in Mortgage loans held for sale on the Consolidated Balance Sheets were (in thousands):


		June 30, 2021				December 31, 2020					September 30, 2021				December 31, 2020
		Unpaid Principal Balance/ Notional		Fair Value		Unpaid Principal Balance/ Notional		Fair Value			Unpaid Principal Balance/ Notional		Fair Value		Unpaid Principal Balance/ Notional		Fair Value
Residential mortgage loans held for sale	Residential mortgage loans held for sale	$	187,179	$	191,290	$	227,161	$	236,444	Residential mortgage loans held for sale	$	163,924	$	166,670	$	227,161	$	236,444
Residential mortgage loan commitments	Residential mortgage loan commitments	276,154		10,202		380,637		20,435		Residential mortgage loan commitments	239,066		8,249		380,637		20,435
Forward sales contracts	Forward sales contracts	427,566		(650)		549,414		(4,563)		Forward sales contracts	355,961		1,894		549,414		(4,563)
				$	200,842			$	252,316				$	176,813			$	252,316

~~NaN~~No residential mortgage loans held for sale were 90 days or more past due or considered impaired as of ~~June~~September 30, 2021 or December 31, 2020. ~~NaN~~No credit losses were recognized on residential mortgage loans held for sale for the ~~six~~nine month period ended ~~June~~September 30, 2021 and 2020.

Mortgage banking revenue was as follows (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Production revenue:	Production revenue:									Production revenue:
Net realized gains on sale of mortgage loans	Net realized gains on sale of mortgage loans	$	20,783	$	24,109	$	46,783	$	33,826	Net realized gains on sale of mortgage loans	$	16,177	$	36,300	$	62,960	$	70,126
Net change in unrealized gain (loss) on mortgage loans held for sale	Net change in unrealized gain (loss) on mortgage loans held for sale	1,783		5,024		(5,172)		8,585		Net change in unrealized gain (loss) on mortgage loans held for sale	(1,365)		(1,672)		(6,537)		6,913
Net change in the fair value of mortgage loan commitments	Net change in the fair value of mortgage loan commitments	(1,253)		3,381		(10,233)		22,398		Net change in the fair value of mortgage loan commitments	(1,953)		1,593		(12,186)		23,991
Net change in the fair value of forward sales contracts	Net change in the fair value of forward sales contracts	(11,309)		6,671		3,913		(4,054)		Net change in the fair value of forward sales contracts	2,544		2,210		6,457		(1,844)
Total production revenue	Total production revenue	10,004		39,185		35,291		60,755		Total production revenue	15,403		38,431		50,694		99,186
Servicing revenue	Servicing revenue	11,215		14,751		23,041		30,348		Servicing revenue	10,883		13,528		33,924		43,876
Total mortgage banking revenue	Total mortgage banking revenue	$	21,219	$	53,936	$	58,332	$	91,103	Total mortgage banking revenue	$	26,286	$	51,959	$	84,618	$	143,062

Production revenue includes gain (loss) on residential mortgage loans held for sale and changes in the fair value of derivative contracts not designated as hedging instruments for accounting purposes related to residential mortgage loan commitments and forward sales contracts. Servicing revenue includes servicing fee income and late charges on loans serviced for others.

- 7473 -

Residential Mortgage Servicing

Mortgage servicing rights may be originated or purchased. Both originated and purchased mortgage servicing rights are initially recognized at fair value. The Company has elected to carry all mortgage servicing rights at fair value. Changes in the fair value are recognized in earnings as they occur. The unpaid principal balance of loans serviced for others is the primary driver of servicing revenue.

The following represents a summary of mortgage servicing rights (dollars in thousands):


		June 30, 2021			December 31, 2020				September 30, 2021			December 31, 2020
Number of residential mortgage loans serviced for others	Number of residential mortgage loans serviced for others	98,287			106,201			Number of residential mortgage loans serviced for others	97,425			106,201
Outstanding principal balance of residential mortgage loans serviced for others	Outstanding principal balance of residential mortgage loans serviced for others	$	14,887,909		$	16,228,449		Outstanding principal balance of residential mortgage loans serviced for others	$	14,907,736		$	16,228,449
Weighted average interest rate	Weighted average interest rate	3.73		%	3.84		%	Weighted average interest rate	3.68		%	3.84		%
Remaining term (in months)	Remaining term (in months)	278			280			Remaining term (in months)	278			280

The following represents activity in capitalized mortgage servicing rights (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Beginning Balance	Beginning Balance	$	132,915	$	110,828	$	101,172	$	201,886	Beginning Balance	$	117,629	$	97,971	$	101,172	$	201,886
Additions	Additions	7,937		8,465		17,767		13,906		Additions	11,540		7,424		29,307		21,330
Disposals	Disposals	0		(10,801)		0		(10,801)		Disposals	—		—		—		(10,801)
Change in fair value due to principal payments	Change in fair value due to principal payments	(10,182)		(9,760)		(22,143)		(17,779)		Change in fair value due to principal payments	(8,806)		(11,192)		(30,949)		(28,971)
Change in fair value due to market assumption changes	Change in fair value due to market assumption changes	(13,041)		(761)		20,833		(89,241)		Change in fair value due to market assumption changes	12,945		3,441		33,778		(85,800)
Ending Balance	Ending Balance	$	117,629	$	97,971	$	117,629	$	97,971	Ending Balance	$	133,308	$	97,644	$	133,308	$	97,644

Changes in the fair value of mortgage servicing rights due to market assumption changes are included in Other operating revenue in the Consolidated Statements of Earnings. Changes in fair value due to principal payments 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 market assumptions used to determine fair value based on significant unobservable inputs were as follows:


		June 30, 2021	December 31, 2020		September 30, 2021	December 31, 2020
Discount rate – risk-free rate plus a market premium	Discount rate – risk-free rate plus a market premium	8.87%	9.14%	Discount rate – risk-free rate plus a market premium	8.46%	9.14%
Prepayment rate - based upon loan interest rate, original term and loan type	Prepayment rate - based upon loan interest rate, original term and loan type	7.81% - 19.08%	9.41% - 21.87%	Prepayment rate - based upon loan interest rate, original term and loan type	13.57%	19.73%
Loan servicing costs – annually per loan based upon loan type:	Loan servicing costs – annually per loan based upon loan type:			Loan servicing costs – annually per loan based upon loan type:
Performing loans	Performing loans	$69 - $94	$69 - $94	Performing loans	$69 - $85	$69 - $94
Delinquent loans	Delinquent loans	$150 - $500	$150 - $500	Delinquent loans	$150 - $500	$150 - $500
Loans in foreclosure	Loans in foreclosure	$1,000 - $4,000	$1,000 - $4,000	Loans in foreclosure	$1,000 - $4,000	$1,000 - $4,000
Escrow earnings rate – indexed to rates paid on deposit accounts with comparable average life	Escrow earnings rate – indexed to rates paid on deposit accounts with comparable average life	0.95%	0.43%	Escrow earnings rate – indexed to rates paid on deposit accounts with comparable average life	1.08%	0.43%
Primary/secondary mortgage rate spread	Primary/secondary mortgage rate spread	105 bps	105 bps	Primary/secondary mortgage rate spread	105 bps	105 bps
Delinquency rate	Delinquency rate	2.67%	3.54%	Delinquency rate	2.36%	3.54%

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.

- 7574 -

(6) Commitments and Contingent Liabilities

Litigation Contingencies

On June 24, 2015, BOKF, NA received a complaint ~~alleging~~ that an employee had colluded with a bond issuer and an individual in misusing revenues pledged to municipal bonds for which BOKF, NA served as trustee under the bond indenture. The Company conducted an investigation and concluded that employees in one of its Corporate Trust offices had, with respect to a single group of affiliated bond issuances, violated Company policies and procedures by waiving financial covenants, granting forbearances and accepting without disclosure to the bondholders, debt service payments from sources other than pledged revenues. The relationship manager was terminated. The Company reported the circumstances to, and cooperated with an investigation by, the Securities and Exchange Commission ("SEC"). On September 7, 2016, BOKF, NA agreed, and the SEC entered, a consent order finding that BOKF, NA had violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act and requiring BOKF, NA to disgorge $1,067,721 of fees and pay a civil penalty of $600,000. BOKF, NA disgorged the fees and paid the penalty.

On December 28, 2015, in an action brought by the SEC, the United States District Court for the District of New Jersey entered a judgment against the principals involved in issuing the bonds, precluding the principals from denying the alleged violations of the federal securities laws and requiring the principals to pay all outstanding principal, accrued interest, and other amounts required under the bond documents, less the value of the facilities securing repayment of the bonds, subject to oversight by a court appointed monitor (“Payment Plan”).

On August 26, 2016, BOKF, NA was sued in the United States District Court for New Jersey by 2 bondholders in a putative class action ~~on behalf of all holders of the bonds~~ alleging BOKF, NA participated in the fraudulent sale of securities by the principals. The ~~New Jersey Federal District Action~~action remains stayed with no current deadlines pending. On September 14, 2016, BOKF, NA was sued in the District Court of Tulsa County, Oklahoma by 19 bondholders also alleging BOKF, NA participated in the fraudulent sale of securities by the principals. The Tulsa County District Court ~~Action~~action is pending on BOKF, NA’s motion to dismiss the plaintiff's Third Amended Petition.

On December 28, 2015, in an action brought by the SEC, the New Jersey District Court entered a judgment against the principals involved in issuing the bonds, precluding them from denying the alleged violations of the federal securities laws and requiring the principals to pay all outstanding bond amounts. On January 8, 2020, the ~~New Jersey District~~ Court entered judgment against the principal individual and his wife for $36,805,051 in principal amount and $10,937,831 in pre-judgment interest. On January 17, 2020, the New Jersey Federal District Court formally terminated the Payment Plan. Management is no longer able to conclude that the individual principal and his wife will be successful in paying the obligations they have to pay the bonds in full but such obligations remain and are not dischargeable in bankruptcy. The SEC continues to aggressively pursue collection of the ~~judgment garnishments on entities either related to or holding assets for the debtor and recently obtained a charging order against equity interests in multiple entities owned by the debtor.~~judgment. If the individual principal and his wife ~~do not have the financial ability to~~cannot pay the bonds, ~~in full,~~ a bondholder loss could become probable. Management has been advised by counsel that BOKF, NA has valid defenses to claims of bondholders and that no loss to the Company is probable. No provision for losses has been made at this time. BOKF, NA estimates that, upon sale of all remaining collateral securing payment of the bonds, approximately $20 million will remain outstanding. A reasonable estimate cannot be made of the amount of any bondholder loss, though the amount of bondholder loss could be material to the Company in the event a loss to the Company becomes probable.

~~On March 5, 2018, BOKF, NA was sued~~The previously reported action in ~~the~~ Fulton, Georgia County District Court brought against BOKF, NA by a Wrongful Death Judgment Creditor ~~of one of the operators of a nursing home financed~~has been dismissed by one of the bonds which are the subject of the litigation discussed above. The judgment is alleged to total approximately $8 million in principal and interest at this time. Plaintiff alleges that this conduct prevented her from collecting on her judgment. On April 19, 2019, the Court ~~granted BOKF, NA's Motion to Dismiss. On May 3, 2019,~~and the ~~plaintiff filed a Motion~~time for ~~Reconsideration which remains pending. BOKF, NA is advised by counsel that BOKF, NA~~appeal has ~~valid defenses to the plaintiffs’ claims and no loss is probable.~~expired.

On ~~March 7, 2017, a plaintiff filed a~~September 29, 2021, The United States Court of Appeals for the Fifth Circuit affirmed the dismissal of the previously reported putative class action in the United States District Court for the Northern District of Texas alleging an extended overdraft fee charged by BOKF, NA ~~is interest and exceeds permitted rates. On September 18, 2018, the District Court dismissed the Texas action and the plaintiff appealed the~~was interest. The dismissal ~~to the United States Court of Appeals for the Fifth Circuit which heard argument on October 8, 2019. On August 22, 2018, a plaintiff filed a second putative class action in~~by the United States District Court for New Mexico ~~making~~of a second putative class action in which the plaintiff made the same allegations as were made in the Texas ~~action. The District Court dismissed the plaintiff's action. The plaintiff has appealed~~action remains on appeal to the United States Court of Appeals for the Tenth Circuit. Management is advised by counsel that a loss is not probable ~~in either the now dismissed Texas action or the New Mexico action~~ and that the loss, if any, cannot be reasonably estimated.

~~- 76 -~~

On March 7, 2020, 3 former employees sued BOKF, NA, the Plan Committee of the BOKF, NA 401k Plan, and Cavanal Hill Investment Management, Inc., a subsidiary of BOKF, NA, alleging that the ~~Defendants~~defendants included proprietary investment products as investment options in the BOKF, NA 401k Plan, whose fees were too high and performance too low, for the purpose of earning fees. The action is brought as a putative class action on behalf of all Plan Participants. The action is pending on the defendants' motion to dismiss. Management is advised by counsel that a loss is not probable and that the loss, if any, cannot be reasonably estimated.

In 2019, a limited liability partnership sued BOKF, NA in Colorado District Court alleging that the Bank breached various fiduciary duties ~~acting in its capacity~~ as trustee of a trust that was a co-general partner of the partnership and claiming in excess of $60 million in damages. From 2000 to 2009, BOKF was serving as personal representative of the estate of the creator of the trust. In 2009, BOKF moved to close the probate of the estate in the Colorado Probate Court. The members of the partnership who now sue BOKF objected to the closing of the estate ~~making~~and made the same allegations in the 2009 in probate hearing as they now make in the 2019 ~~in the~~ Colorado District ~~Court.~~Court action. In 2009, the Colorado Probate Court entered summary judgment against the beneficiaries and the estate was closed. In the ~~current~~2019 action, the Colorado District Court ~~has now~~ denied BOKF’s motions for summary judgment and ~~the matter will proceed to trial.~~discovery has proceeded. Management is advised by counsel that a loss is not probable and that the loss, if any, cannot be reasonably estimated.

- 75 -

In the ordinary course of business, BOK Financial and its subsidiaries are subject to legal actions and complaints. Management believes, based upon the opinion of counsel, that the actions and liability or loss, if any, resulting from the final outcomes of the proceedings, will not have a material effect on the Company’s financial condition, results of operations or cash flows.

Alternative Investment Commitments

The Company sponsors a private equity fund and invests in several tax credit entities and other funds as permitted by banking regulations. Consolidation of these investments is based on the variable interest model.

At ~~June~~September 30, 2021, the Company has ~~$342~~$353 million in interests in various alternative investments generally consisting of unconsolidated limited partnership interests in entities for which investment return is in the form of low income housing tax credits or other investments in merchant banking activities. This investment balance also includes ~~$117~~$122 million of unfunded commitments included in Other liabilities on the Consolidated Balance Sheets.

- 7776 -

(7) Shareholders' Equity

On ~~August 3,~~November 2, 2021, the Company declared a quarterly cash dividend of ~~$0.52~~$0.53 per common share payable on or about ~~August 26,~~November 24, 2021 to shareholders of record as of ~~August 16,~~November 15, 2021.

Dividends declared were $0.52 and ~~$1.04~~$1.56 per share during the three and ~~six~~nine months ended ~~June~~September 30, 2021 and $0.51 and ~~1.02~~1.53 per share during the three and ~~six~~nine months ended ~~June~~September 30, 2020.

Accumulated Other Comprehensive Income (Loss)

AOCI includes unrealized gains and losses on available for sale ("AFS") securities and non-credit related unrealized losses on AFS securities for which an other-than-temporary impairment has been recorded in earnings. Unrealized losses on employee benefit plans will be reclassified into income as pension plan costs are recognized over the remaining service period of plan participants. Gains and losses in AOCI are net of deferred income taxes.

A rollforward of the components of accumulated other comprehensive income (loss) is included as follows (in thousands):


		Unrealized Gain (Loss) on							Unrealized Gain (Loss) on
		Available for Sale Securities		Employee Benefit Plans		Total			Available for Sale Securities		Employee Benefit Plans		Total
Balance, Dec. 31, 2019	Balance, Dec. 31, 2019	$	104,996	$	(73)	$	104,923	Balance, Dec. 31, 2019	$	104,996	$	(73)	$	104,923
Net change in unrealized gain (loss)	Net change in unrealized gain (loss)	354,765		0		354,765		Net change in unrealized gain (loss)	347,985		—		347,985
Reclassification adjustments included in earnings:	Reclassification adjustments included in earnings:							Reclassification adjustments included in earnings:

Gain on available for sale securities, net	Gain on available for sale securities, net	(5,583)		0		(5,583)		Gain on available for sale securities, net	(5,571)		—		(5,571)
Other comprehensive income, before income taxes	Other comprehensive income, before income taxes	349,182		0		349,182		Other comprehensive income, before income taxes	342,414		—		342,414
Federal and state income taxes	Federal and state income taxes	83,789		0		83,789		Federal and state income taxes	82,167		—		82,167
Other comprehensive income, net of income taxes	Other comprehensive income, net of income taxes	265,393		0		265,393		Other comprehensive income, net of income taxes	260,247		—		260,247
Balance, June 30, 2020		$	370,389	$	(73)	$	370,316
Balance, September 30, 2020								Balance, September 30, 2020	$	365,243	$	(73)	$	365,170

Balance, Dec. 31, 2020	Balance, Dec. 31, 2020	$	335,032	$	836	$	335,868	Balance, Dec. 31, 2020	$	335,032	$	836	$	335,868
Net change in unrealized gain (loss)	Net change in unrealized gain (loss)	(141,651)		0		(141,651)		Net change in unrealized gain (loss)	(216,176)		—		(216,176)
Reclassification adjustments included in earnings:	Reclassification adjustments included in earnings:							Reclassification adjustments included in earnings:
Gain on available for sale securities, net	Gain on available for sale securities, net	(1,897)		0		(1,897)		Gain on available for sale securities, net	(3,152)		—		(3,152)
Other comprehensive income, before income taxes	Other comprehensive income, before income taxes	(143,548)		0		(143,548)		Other comprehensive income, before income taxes	(219,328)		—		(219,328)
Federal and state income taxes	Federal and state income taxes	(34,448)		0		(34,448)		Federal and state income taxes	(52,632)		—		(52,632)
Other comprehensive income (loss), net of income taxes	Other comprehensive income (loss), net of income taxes	(109,100)		0		(109,100)		Other comprehensive income (loss), net of income taxes	(166,696)		—		(166,696)
Balance, June 30, 2021		$	225,932	$	836	$	226,768
Balance, September 30, 2021								Balance, September 30, 2021	$	168,336	$	836	$	169,172

- 7877 -

(8) Earnings Per Share


(In thousands, except share and per share amounts)	(In thousands, except share and per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,				(In thousands, except share and per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Numerator:	Numerator:									Numerator:
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders	$	166,421	$	64,693	$	312,481	$	126,772	Net income attributable to BOK Financial Corp. shareholders	$	188,322	$	154,034	$	500,803	$	280,806
Less: Earnings allocated to participating securities	Less: Earnings allocated to participating securities	1,170		397		2,107		740		Less: Earnings allocated to participating securities	1,351		938		3,458		1,678
Numerator for basic earnings per share – income available to common shareholders	Numerator for basic earnings per share – income available to common shareholders	165,251		64,296		310,374		126,032		Numerator for basic earnings per share – income available to common shareholders	186,971		153,096		497,345		279,128
Effect of reallocating undistributed earnings of participating securities	Effect of reallocating undistributed earnings of participating securities	1		0		0		0		Effect of reallocating undistributed earnings of participating securities	—		—		—		—
Numerator for diluted earnings per share – income available to common shareholders	Numerator for diluted earnings per share – income available to common shareholders	$	165,252	$	64,296	$	310,374	$	126,032	Numerator for diluted earnings per share – income available to common shareholders	$	186,971	$	153,096	$	497,345	$	279,128

Denominator:	Denominator:									Denominator:
Weighted average shares outstanding	Weighted average shares outstanding	69,302,245		70,307,606		69,442,239		70,410,707		Weighted average shares outstanding	68,852,688		70,306,233		69,243,562		70,375,628
Less: Participating securities included in weighted average shares outstanding	Less: Participating securities included in weighted average shares outstanding	486,579		431,563		466,496		410,842		Less: Participating securities included in weighted average shares outstanding	493,563		428,367		475,518		416,684
Denominator for basic earnings per common share	Denominator for basic earnings per common share	68,815,666		69,876,043		68,975,743		69,999,865		Denominator for basic earnings per common share	68,359,125		69,877,866		68,768,044		69,958,944
Dilutive effect of employee stock compensation plans1	Dilutive effect of employee stock compensation plans1	1,776		1,424		3,055		3,952		Dilutive effect of employee stock compensation plans1	1,746		1,424		2,619		3,109
Denominator for diluted earnings per common share	Denominator for diluted earnings per common share	68,817,442		69,877,467		68,978,798		70,003,817		Denominator for diluted earnings per common share	68,360,871		69,879,290		68,770,663		69,962,053

Basic earnings per share	Basic earnings per share	$	2.40	$	0.92	$	4.50	$	1.80	Basic earnings per share	$	2.74	$	2.19	$	7.23	$	3.99
Diluted earnings per share	Diluted earnings per share	$	2.40	$	0.92	$	4.50	$	1.80	Diluted earnings per share	$	2.74	$	2.19	$	7.23	$	3.99
1 Excludes employee stock options with exercise prices greater than current market price.	1 Excludes employee stock options with exercise prices greater than current market price.	0		22,238		0		0		1 Excludes employee stock options with exercise prices greater than current market price.	—		19,227		—		—

- 7978 -

(9) Reportable Segments

Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended ~~June~~September 30, 2021 is as follows (in thousands):


		Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated			Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated
Net interest revenue from external sources	Net interest revenue from external sources	$	151,942	$	17,552	$	52,966	$	57,849	$	280,309	Net interest revenue from external sources	$	150,211	$	16,967	$	55,697	$	57,352	$	280,227
Net interest revenue (expense) from internal sources	Net interest revenue (expense) from internal sources	(21,041)		7,393		(673)		14,321		0		Net interest revenue (expense) from internal sources	(16,107)		10,255		(501)		6,353		—
Net interest revenue	Net interest revenue	130,901		24,945		52,293		72,170		280,309		Net interest revenue	134,104		27,222		55,196		63,705		280,227
Provision for credit losses	Provision for credit losses	16,268		425		(54)		(51,639)		(35,000)		Provision for credit losses	2,807		928		(70)		(26,665)		(23,000)
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	114,633		24,520		52,347		123,809		315,309		Net interest revenue after provision for credit losses	131,297		26,294		55,266		90,370		303,227
Other operating revenue	Other operating revenue	65,269		37,714		79,149		9,314		191,446		Other operating revenue	92,511		44,401		97,888		(4,968)		229,832
Other operating expense	Other operating expense	71,351		52,453		79,429		87,919		291,152		Other operating expense	68,301		49,483		87,417		86,076		291,277
Net direct contribution	Net direct contribution	108,551		9,781		52,067		45,204		215,603		Net direct contribution	155,507		21,212		65,737		(674)		241,782
Gain (loss) on financial instruments, net	Gain (loss) on financial instruments, net	34		17,137		0		(17,171)		0		Gain (loss) on financial instruments, net	44		(5,949)		—		5,905		—
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	0		(13,041)		0		13,041		0		Change in fair value of mortgage servicing rights	—		12,945		—		(12,945)		—
Gain (loss) on repossessed assets, net	Gain (loss) on repossessed assets, net	3,565		0		0		(3,565)		0		Gain (loss) on repossessed assets, net	(3,945)		—		—		3,945		—
Corporate expense allocations	Corporate expense allocations	12,512		11,599		10,343		(34,454)		0		Corporate expense allocations	11,769		11,516		10,101		(33,386)		—
Net income before taxes	Net income before taxes	99,638		2,278		41,724		71,963		215,603		Net income before taxes	139,837		16,692		55,636		29,617		241,782
Federal and state income taxes	Federal and state income taxes	27,006		580		10,663		10,247		48,496		Federal and state income taxes	37,143		4,260		14,230		(1,572)		54,061
Net income	Net income	72,632		1,698		31,061		61,716		167,107		Net income	102,694		12,432		41,406		31,189		187,721
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	0		0		0		686		686		Net income (loss) attributable to non-controlling interests	—		—		—		(601)		(601)
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders	$	72,632	$	1,698	$	31,061	$	61,030	$	166,421	Net income attributable to BOK Financial Corp. shareholders	$	102,694	$	12,432	$	41,406	$	31,790	$	188,322

Average assets	Average assets	$	28,160,594	$	10,087,488	$	19,201,041	$	(7,252,201)	$	50,196,922	Average assets	$	28,474,182	$	10,083,593	$	19,109,700	$	(8,168,326)	$	49,499,149

- 8079 -

Reportable segments reconciliation to the Consolidated Financial Statements for the ~~six~~nine months ended ~~June~~September 30, 2021 is as follows (in thousands):


		Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated			Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated
Net interest revenue from external sources	Net interest revenue from external sources	$	307,741	$	34,238	$	101,520	$	117,230	$	560,729	Net interest revenue from external sources	$	457,953	$	51,205	$	157,217	$	174,581	$	840,956
Net interest revenue (expense) from internal sources	Net interest revenue (expense) from internal sources	(46,835)		11,681		(873)		36,027		0		Net interest revenue (expense) from internal sources	(62,941)		21,936		(1,375)		42,380		—
Net interest revenue	Net interest revenue	260,906		45,919		100,647		153,257		560,729		Net interest revenue	395,012		73,141		155,842		216,961		840,956
Provision for credit losses	Provision for credit losses	30,253		1,561		(83)		(91,731)		(60,000)		Provision for credit losses	33,061		2,489		(153)		(118,397)		(83,000)
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	230,653		44,358		100,730		244,988		620,729		Net interest revenue after provision for credit losses	361,951		70,652		155,995		335,358		923,956
Other operating revenue	Other operating revenue	111,848		89,996		145,272		21,384		368,500		Other operating revenue	204,358		134,396		243,160		16,418		598,332
Other operating expense	Other operating expense	138,330		108,076		157,994		182,536		586,936		Other operating expense	206,630		157,558		245,411		268,614		878,213
Net direct contribution	Net direct contribution	204,171		26,278		88,008		83,836		402,293		Net direct contribution	359,679		47,490		153,744		83,162		644,075
Gain (loss) on financial instruments, net	Gain (loss) on financial instruments, net	67		(12,479)		0		12,412		0		Gain (loss) on financial instruments, net	111		(18,427)		—		18,316		—
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	0		20,833		0		(20,833)		0		Change in fair value of mortgage servicing rights	—		33,778		—		(33,778)		—
Gain (loss) on repossessed assets, net	Gain (loss) on repossessed assets, net	16,302		41		0		(16,343)		0		Gain (loss) on repossessed assets, net	12,355		41		—		(12,396)		—
Corporate expense allocations	Corporate expense allocations	25,246		23,073		20,230		(68,549)		0		Corporate expense allocations	37,015		34,590		30,330		(101,935)		—
Net income before taxes	Net income before taxes	195,294		11,600		67,778		127,621		402,293		Net income before taxes	335,130		28,292		123,414		157,239		644,075
Federal and state income taxes	Federal and state income taxes	52,989		2,954		17,335		17,600		90,878		Federal and state income taxes	90,130		7,214		31,565		16,030		144,939
Net income	Net income	142,305		8,646		50,443		110,021		311,415		Net income	245,000		21,078		91,849		141,209		499,136
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	0		0		0		(1,066)		(1,066)		Net income (loss) attributable to non-controlling interests	—		—		—		(1,667)		(1,667)
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders	$	142,305	$	8,646	$	50,443	$	111,087	$	312,481	Net income attributable to BOK Financial Corp. shareholders	$	245,000	$	21,078	$	91,849	$	142,876	$	500,803

Average assets	Average assets	$	28,104,137	$	9,922,431	$	18,924,987	$	(6,698,092)	$	50,253,463	Average assets	$	28,228,840	$	9,976,742	$	18,987,234	$	(7,193,554)	$	49,999,262

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Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended September 30, 2020 is as follows (in thousands):


	Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated
Net interest revenue from external sources	$	173,248	$	15,821	$	34,098	$	48,583	$	271,750
Net interest revenue (expense) from internal sources	(23,302)		17,309		(11,113)		17,106		—
Net interest revenue	149,946		33,130		22,985		65,689		271,750
Provision for credit losses	22,599		79		(51)		(22,627)		—
Net interest revenue after provision for credit losses	127,347		33,051		23,036		88,316		271,750
Other operating revenue	52,021		67,808		111,152		(1,043)		229,938
Other operating expense	66,846		59,155		82,868		88,175		297,044
Net direct contribution	112,522		41,704		51,320		(902)		204,644
Gain (loss) on financial instruments, net	38		1,540		—		(1,578)		—
Change in fair value of mortgage servicing rights	—		3,441		—		(3,441)		—
Gain (loss) on repossessed assets, net	(4,332)		41		—		4,291		—
Corporate expense allocations	5,172		10,691		9,397		(25,260)		—
Net income before taxes	103,056		36,035		41,923		23,630		204,644
Federal and state income taxes	27,959		9,180		10,711		2,702		50,552
Net income	75,097		26,855		31,212		20,928		154,092
Net income (loss) attributable to non-controlling interests	—		—		—		58		58
Net income attributable to BOK Financial Corp. shareholders	$	75,097	$	26,855	$	31,212	$	20,870	$	154,034

Average assets	$	28,000,183	$	9,898,112	$	16,204,510	$	(5,171,050)	$	48,931,755

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Reportable segments reconciliation to the Consolidated Financial Statements for the ~~three~~nine months ended ~~June~~September 30, 2020 is as follows (in thousands):

Commercial Consumer Wealth
Management Funds Management and Other BOK
Financial
Consolidated
Net interest revenue from external sources $ 174,314 $ 18,795 $ 34,359 $ 50,636 $ 278,104
Net interest revenue (expense) from internal sources (29,205) 20,475 (7,479) 16,209 0
Net interest revenue 145,109 39,270 26,880 66,845 278,104
Provision for credit losses 13,762 535 (89) 121,113 135,321
Net interest revenue after provision for credit losses 131,347 38,735 26,969 (54,268) 142,783
Other operating revenue 47,898 67,192 106,674 11,508 233,272
Other operating expense 62,933 58,249 80,567 94,217 295,966
Net direct contribution 116,312 47,678 53,076 (136,977) 80,089
Gain (loss) on financial instruments, net 48 7,356 0 (7,404) 0
Change in fair value of mortgage servicing rights 0 (761) 0 761 0
Gain (loss) on repossessed assets, net 191 27 0 (218) 0
Corporate expense allocations 5,437 10,692 8,204 (24,333) 0
Net income before taxes 111,114 43,608 44,872 (119,505) 80,089
Federal and state income taxes 30,122 11,107 11,478 (36,904) 15,803
Net income 80,992 32,501 33,394 (82,601) 64,286
Net income (loss) attributable to non-controlling interests 0 0 0 (407) (407)
Net income attributable to BOK Financial Corp. shareholders $ 80,992 $ 32,501 $ 33,394 $ (82,194) $ 64,693
Average assets $ 27,575,652 $ 9,920,005 $ 15,721,452 $ (3,460,078) $ 49,757,031



	Commercial		Consumer		Wealth Management		Funds Management and Other1		BOK Financial Consolidated
Net interest revenue from external sources	$	549,464	$	60,492	$	82,823	$	118,435	$	811,214
Net interest revenue (expense) from internal sources	(103,002)		55,840		(14,054)		61,216		—
Net interest revenue	446,462		116,332		68,769		179,651		811,214
Provision for credit losses	53,241		1,870		(188)		174,169		229,092
Net interest revenue after provision for credit losses	393,221		114,462		68,957		5,482		582,122
Other operating revenue	138,139		190,062		315,707		(376)		643,532
Other operating expense	190,531		171,172		241,627		258,307		861,637
Net direct contribution	340,829		133,352		143,037		(253,201)		364,017
Gain (loss) on financial instruments, net	135		95,660		7		(95,802)		—
Change in fair value of mortgage servicing rights	—		(85,800)		—		85,800		—
Gain (loss) on repossessed assets, net	(4,132)		81		—		4,051		—
Corporate expense allocations	19,514		31,749		25,866		(77,129)		—
Net income before taxes	317,318		111,544		117,178		(182,023)		364,017
Federal and state income taxes	86,254		28,411		29,999		(61,009)		83,655
Net income	231,064		83,133		87,179		(121,014)		280,362
Net income (loss) attributable to non-controlling interests	—		—		—		(444)		(444)
Net income attributable to BOK Financial Corp. shareholders	$	231,064	$	83,133	$	87,179	$	(120,570)	$	280,806

Average assets	$	26,759,150	$	9,889,687	$	14,887,947	$	(3,397,414)	$	48,139,370

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~~Reportable segments reconciliation to the Consolidated Financial Statements for the six months ended June 30, 2020 is as follows (in thousands):~~

Commercial Consumer Wealth
Management
Funds Management and Other1
BOK
Financial
Consolidated
Net interest revenue from external sources $ 376,216 $ 44,671 $ 48,725 $ 69,852 $ 539,464
Net interest revenue (expense) from internal sources (79,700) 38,531 (2,941) 44,110 0
Net interest revenue 296,516 83,202 45,784 113,962 539,464
Provision for credit losses 30,642 1,791 (137) 196,796 229,092
Net interest revenue after provision for credit losses 265,874 81,411 45,921 (82,834) 310,372
Other operating revenue 86,118 122,254 204,555 667 413,594
Other operating expense 123,685 112,017 158,759 170,132 564,593
Net direct contribution 228,307 91,648 91,717 (252,299) 159,373
Gain (loss) on financial instruments, net 97 94,120 7 (94,224) 0
Change in fair value of mortgage servicing rights 0 (89,241) 0 89,241 0
Gain (loss) on repossessed assets, net 200 40 0 (240) 0
Corporate expense allocations 14,342 21,059 16,469 (51,870) 0
Net income before taxes 214,262 75,508 75,255 (205,652) 159,373
Federal and state income taxes 58,295 19,232 19,288 (63,712) 33,103
Net income 155,967 56,276 55,967 (141,940) 126,270
Net income (loss) attributable to non-controlling interests 0 0 0 (502) (502)
Net income attributable to BOK Financial Corp. shareholders $ 155,967 $ 56,276 $ 55,967 $ (141,438) $ 126,772
Average assets $ 26,131,814 $ 9,885,429 $ 14,222,432 $ (2,500,850) $ 47,738,825

~~- 83~~ -

(10) Fees and Commissions Revenue

Fees and commissions revenue is generated through the sales of products, consisting primarily of financial instruments, and the performance of services for customers under contractual obligations. Revenue from providing services for customers is recognized at the time services are provided in an amount that reflects the consideration we expect to be entitled to for those services. Revenue is recognized based on the application of five steps:

•Identify the contract with a customer

•Identify the performance obligations in the contract

•Determine the transaction price

•Allocate the transaction price to the performance obligations in the contract

•Recognize revenue when (or as) the Company satisfies a performance obligation

For contracts with multiple performance obligations, individual performance obligations are accounted for separately if the customer can benefit from the good or service on its own or with other resources readily available to the customer and the promise to transfer goods and services to the customer is separately identifiable in the contract. The transaction price is allocated to the performance obligations based on relative standalone selling prices.

Revenue is recognized on a gross basis whenever we have primary responsibility and risk in providing the services or products to our customers and have discretion in establishing the price for the services or products. Revenue is recognized on a net basis whenever we act as an agent for products or services of others.

Brokerage and trading revenue includes revenues from trading, customer hedging, retail brokerage and investment banking. Trading revenue includes net realized and unrealized gains primarily related to sales of securities to institutional customers and related derivative contracts. Customer hedging revenue includes realized and unrealized changes in the fair value of derivative contracts held for customer risk management programs including credit valuation adjustments, as necessary. We offer commodity, interest rate, foreign exchange and equity derivatives to our customers. These customer contracts are offset with contracts with selected counterparties and exchanges to minimize changes in market risk from changes in commodity prices, interest rates or foreign exchange rates. Retail brokerage revenue represents fees and commissions earned on sales of fixed income securities, annuities, mutual funds and other financial instruments to retail customers. Investment banking revenue includes fees earned upon completion of underwriting and financial advisory services. Investment banking revenue also includes fees earned in conjunction with loan syndications. Insurance brokerage revenues represents fees and commissions earned on placement of insurance products with carriers for property and casualty and health coverage.

Transaction card revenue includes merchant discount fees and electronic funds transfer network fees, net of interchange fees paid to card issuers and assessments paid to card networks. Merchant discount fees represent fees paid by customers for account management and electronic processing of card transactions. Merchant discount fees are recognized at the time the customer’s transactions are processed or other services are performed. The Company also maintains the TransFund electronic funds transfer network for the benefit of its members, which includes the Bank. Electronic funds transfer fees are recognized as electronic transactions processed on behalf of its members.

Fiduciary and asset management revenue includes fees from asset management, custody, recordkeeping, investment advisory and administration services. Revenue is recognized on an accrual basis at the time the services are performed and may be based on either the fair value of the account or the service provided.

Deposit service charges and fees include commercial account service charges, overdraft fees, check card fee revenue and automated service charge and other deposit service fees. Fees are recognized at least quarterly in accordance with published deposit account agreements and disclosure statements for retail accounts or contractual agreements for commercial accounts. Item charges for overdraft or non-sufficient funds items are recognized as items are presented for payment. Account balance charges and activity fees are accrued monthly and collected in arrears. Commercial account activity fees may be offset by an earnings credit based on account balances. Check card fees represent interchange fees paid by a merchant bank for transactions processed from cards issued by the Company. Check card fees are recognized when transactions are processed.

Mortgage banking revenue includes revenues recognized in conjunction with the origination, marketing and servicing of conventional and government-sponsored residential mortgage loans. Mortgage production revenue includes net realized gains (losses) on sales of residential mortgage loans in the secondary market and the net change in unrealized gains (losses) on residential mortgage loans held for sale. Mortgage production revenue also includes changes in the fair value of derivative contracts not designated as hedging instruments related to residential mortgage loan commitments and forward sales contracts. Mortgage servicing revenue includes servicing fee income and late charges on loans serviced for others.

- 8483 -

Fees and commissions revenue by reportable segment and primary service line is as follows for the three months ended ~~June~~September 30, 2021.


		Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2			Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2
Trading revenue	Trading revenue	$	0	$	0	$	13,002	$	(1)	$	13,001	$	13,001	$	0	Trading revenue	$	—	$	—	$	24,067	$	1	$	24,068	$	24,068	$	—
Customer hedging revenue	Customer hedging revenue	5,693		0		55		(3,943)		1,805		1,805		0		Customer hedging revenue	6,720		—		26		184		6,930		6,930		—
Retail brokerage revenue	Retail brokerage revenue	0		0		4,528		0		4,528		0		4,528		Retail brokerage revenue	—		—		4,887		—		4,887		—		4,887
Insurance brokerage revenue	Insurance brokerage revenue	0		0		2,996		0		2,996		0		2,996		Insurance brokerage revenue	—		—		3,061		—		3,061		—		3,061
Investment banking revenue	Investment banking revenue	3,935		0		3,626		(483)		7,078		2,721		4,357		Investment banking revenue	4,386		—		5,341		(743)		8,984		3,045		5,939
Brokerage and trading revenue	Brokerage and trading revenue	9,628		0		24,207		(4,427)		29,408		17,527		11,881		Brokerage and trading revenue	11,106		—		37,382		(558)		47,930		34,043		13,887
TransFund EFT network revenue	TransFund EFT network revenue	19,374		924		(17)		1		20,282		0		20,282		TransFund EFT network revenue	19,280		920		(18)		1		20,183		—		20,183
Merchant services revenue	Merchant services revenue	3,434		17		0		1		3,452		0		3,452		Merchant services revenue	3,051		12		—		—		3,063		—		3,063
Corporate card revenue	Corporate card revenue	1,063		0		37		89		1,189		0		1,189		Corporate card revenue	1,260		—		45		81		1,386		—		1,386
Transaction card revenue	Transaction card revenue	23,871		941		20		91		24,923		0		24,923		Transaction card revenue	23,591		932		27		82		24,632		—		24,632
Personal trust revenue	Personal trust revenue	0		0		25,156		0		25,156		0		25,156		Personal trust revenue	—		—		24,624		—		24,624		—		24,624
Corporate trust revenue	Corporate trust revenue	0		0		3,435		0		3,435		0		3,435		Corporate trust revenue	—		—		3,814		—		3,814		—		3,814
Institutional trust & retirement plan services revenue	Institutional trust & retirement plan services revenue	0		0		12,828		0		12,828		0		12,828		Institutional trust & retirement plan services revenue	—		—		13,040		—		13,040		—		13,040
Investment management services and other revenue	Investment management services and other revenue	0		0		3,543		(130)		3,413		0		3,413		Investment management services and other revenue	—		—		3,815		(45)		3,770		—		3,770
Fiduciary and asset management revenue	Fiduciary and asset management revenue	0		0		44,962		(130)		44,832		0		44,832		Fiduciary and asset management revenue	—		—		45,293		(45)		45,248		—		45,248
Commercial account service charge revenue	Commercial account service charge revenue	12,710		469		607		(1)		13,785		0		13,785		Commercial account service charge revenue	12,795		463		621		(2)		13,877		—		13,877
Overdraft fee revenue	Overdraft fee revenue	22		4,916		17		2		4,957		0		4,957		Overdraft fee revenue	29		6,098		17		1		6,145		—		6,145
Check card revenue	Check card revenue	0		6,030		0		(1)		6,029		0		6,029		Check card revenue	—		6,293		—		1		6,294		—		6,294
Automated service charge and other deposit fee revenue	Automated service charge and other deposit fee revenue	25		1,042		20		3		1,090		0		1,090		Automated service charge and other deposit fee revenue	24		1,068		21		—		1,113		—		1,113
Deposit service charges and fees	Deposit service charges and fees	12,757		12,457		644		3		25,861		0		25,861		Deposit service charges and fees	12,848		13,922		659		—		27,429		—		27,429
Mortgage production revenue	Mortgage production revenue	0		10,004		0		0		10,004		10,004		0		Mortgage production revenue	—		15,403		—		—		15,403		15,403		—
Mortgage servicing revenue	Mortgage servicing revenue	0		11,668		0		(453)		11,215		11,215		0		Mortgage servicing revenue	—		11,347		—		(464)		10,883		10,883		—
Mortgage banking revenue	Mortgage banking revenue	0		21,672		0		(453)		21,219		21,219		0		Mortgage banking revenue	—		26,750		—		(464)		26,286		26,286		—
Other revenue	Other revenue	17,112		2,644		9,008		(5,592)		23,172		20,041		3,131		Other revenue	8,907		2,801		14,605		(7,417)		18,896		13,092		5,804
Total fees and commissions revenue	Total fees and commissions revenue	$	63,368	$	37,714	$	78,841	$	(10,508)	$	169,415	$	58,787	$	110,628	Total fees and commissions revenue	$	56,452	$	44,405	$	97,966	$	(8,402)	$	190,421	$	73,421	$	117,000

1 Out of scope revenue generally relates to financial instruments or contractual rights and obligations within the scope of other applicable accounting guidance.

2 In scope revenue represents revenue subject to FASB ASC Topic 606, Revenue from Contracts with Customers.

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Fees and commissions revenue by reportable segment and primary service line is as follows for the nine months ended September 30, 2021.



	Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2
Trading revenue	$	—	$	—	$	40,785	$	—	$	40,785	$	40,785	$	—
Customer hedging revenue	16,620		—		172		(5,465)		11,327		11,327		—
Retail brokerage revenue	—		—		14,156		—		14,156		—		14,156
Insurance brokerage revenue	—		—		8,973		—		8,973		—		8,973
Investment banking revenue	10,579		—		13,735		(1,435)		22,879		7,815		15,064
Brokerage and trading revenue	27,199		—		77,821		(6,900)		98,120		59,927		38,193
TransFund EFT network revenue	57,097		2,678		(48)		4		59,731		—		59,731
Merchant services revenue	8,751		45		—		—		8,796		—		8,796
Corporate card revenue	3,127		—		110		221		3,458		—		3,458
Transaction card revenue	68,975		2,723		62		225		71,985		—		71,985
Personal trust revenue	—		—		71,757		(1)		71,756		—		71,756
Corporate trust revenue	—		—		11,038		—		11,038		—		11,038
Institutional trust & retirement plan services revenue	—		—		38,478		—		38,478		—		38,478
Investment management services and other revenue	—		—		10,261		(131)		10,130		—		10,130
Fiduciary and asset management revenue	—		—		131,534		(132)		131,402		—		131,402
Commercial account service charge revenue	37,493		1,366		1,809		(2)		40,666		—		40,666
Overdraft fee revenue	77		15,649		53		3		15,782		—		15,782
Check card revenue	—		17,650		—		—		17,650		—		17,650
Automated service charge and other deposit fee revenue	75		3,260		64		2		3,401		—		3,401
Deposit service charges and fees	37,645		37,925		1,926		3		77,499		—		77,499
Mortgage production revenue	—		50,694		—		—		50,694		50,694		—
Mortgage servicing revenue	—		35,292		—		(1,368)		33,924		33,924		—
Mortgage banking revenue	—		85,986		—		(1,368)		84,618		84,618		—
Other revenue	35,848		7,785		31,148		(16,417)		58,364		46,276		12,088
Total fees and commissions revenue	$	169,667	$	134,419	$	242,491	$	(24,589)	$	521,988	$	190,821	$	331,167

1 Out of scope revenue generally relates to financial instruments or contractual rights and obligations within the scope of other applicable accounting guidance.

2 In scope revenue represents revenue subject to FASB ASC Topic 606, Revenue from Contracts with Customers.

- 85 -

Fees and commissions revenue by reportable segment and primary service line is as follows for the ~~six~~three months ended ~~June~~September 30, ~~2021.~~2020.


		Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2			Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2
Trading revenue	Trading revenue	$	0	$	0	$	16,718	$	(1)	$	16,717	$	16,717	$	0	Trading revenue	$	—	$	—	$	46,890	$	(1)	$	46,889	$	46,889	$	—
Customer hedging revenue	Customer hedging revenue	9,900		0		146		(5,649)		4,397		4,397		0		Customer hedging revenue	7,999		—		123		520		8,642		8,642		—
Retail brokerage revenue	Retail brokerage revenue	0		0		9,269		0		9,269		0		9,269		Retail brokerage revenue	—		—		3,787		—		3,787		—		3,787
Insurance brokerage revenue	Insurance brokerage revenue	0		0		5,912		0		5,912		0		5,912		Insurance brokerage revenue	—		—		3,124		—		3,124		—		3,124
Investment banking revenue	Investment banking revenue	6,193		0		8,394		(692)		13,895		4,770		9,125		Investment banking revenue	2,314		—		4,770		—		7,084		2,280		4,804
Brokerage and trading revenue	Brokerage and trading revenue	16,093		0		40,439		(6,342)		50,190		25,884		24,306		Brokerage and trading revenue	10,313		—		58,694		519		69,526		57,811		11,715
TransFund EFT network revenue	TransFund EFT network revenue	37,817		1,758		(30)		3		39,548		0		39,548		TransFund EFT network revenue	18,840		913		(14)		2		19,741		—		19,741
Merchant services revenue	Merchant services revenue	5,700		33		0		0		5,733		0		5,733		Merchant services revenue	3,019		19		—		—		3,038		—		3,038
Corporate card revenue	Corporate card revenue	1,867		0		65		140		2,072		0		2,072		Corporate card revenue	583		—		21		82		686		—		686
Transaction card revenue	Transaction card revenue	45,384		1,791		35		143		47,353		0		47,353		Transaction card revenue	22,442		932		7		84		23,465		—		23,465
Personal trust revenue	Personal trust revenue	0		0		47,133		0		47,133		0		47,133		Personal trust revenue	—		—		20,130		—		20,130		—		20,130
Corporate trust revenue	Corporate trust revenue	0		0		7,224		0		7,224		0		7,224		Corporate trust revenue	—		—		4,613		—		4,613		—		4,613
Institutional trust & retirement plan services revenue	Institutional trust & retirement plan services revenue	0		0		25,438		0		25,438		0		25,438		Institutional trust & retirement plan services revenue	—		—		11,030		—		11,030		—		11,030
Investment management services and other revenue	Investment management services and other revenue	0		0		6,446		(87)		6,359		0		6,359		Investment management services and other revenue	—		—		4,198		(40)		4,158		—		4,158
Fiduciary and asset management revenue	Fiduciary and asset management revenue	0		0		86,241		(87)		86,154		0		86,154		Fiduciary and asset management revenue	—		—		39,971		(40)		39,931		—		39,931
Commercial account service charge revenue	Commercial account service charge revenue	24,698		903		1,188		0		26,789		0		26,789		Commercial account service charge revenue	11,209		419		572		—		12,200		—		12,200
Overdraft fee revenue	Overdraft fee revenue	48		9,551		36		2		9,637		0		9,637		Overdraft fee revenue	32		5,411		16		4		5,463		—		5,463
Check card revenue	Check card revenue	0		11,357		0		(1)		11,356		0		11,356		Check card revenue	—		5,565		—		—		5,565		—		5,565
Automated service charge and other deposit fee revenue	Automated service charge and other deposit fee revenue	51		2,192		43		2		2,288		0		2,288		Automated service charge and other deposit fee revenue	27		1,007		24		—		1,058		—		1,058
Deposit service charges and fees	Deposit service charges and fees	24,797		24,003		1,267		3		50,070		0		50,070		Deposit service charges and fees	11,268		12,402		612		4		24,286		—		24,286
Mortgage production revenue	Mortgage production revenue	0		35,291		0		0		35,291		35,291		0		Mortgage production revenue	—		38,431		—		—		38,431		38,431		—
Mortgage servicing revenue	Mortgage servicing revenue	0		23,945		0		(904)		23,041		23,041		0		Mortgage servicing revenue	—		13,952		—		(424)		13,528		13,528		—
Mortgage banking revenue	Mortgage banking revenue	0		59,236		0		(904)		58,332		58,332		0		Mortgage banking revenue	—		52,383		—		(424)		51,959		51,959		—
Other revenue	Other revenue	26,941		4,984		16,543		(9,000)		39,468		33,184		6,284		Other revenue	6,062		2,257		12,371		(6,992)		13,698		10,427		3,271
Total fees and commissions revenue	Total fees and commissions revenue	$	113,215	$	90,014	$	144,525	$	(16,187)	$	331,567	$	117,400	$	214,167	Total fees and commissions revenue	$	50,085	$	67,974	$	111,655	$	(6,849)	$	222,865	$	120,197	$	102,668

1 Out of scope revenue generally relates to financial instruments or contractual rights and obligations within the scope of other applicable accounting guidance.

2 In scope revenue represents revenue subject to FASB ASC Topic 606, Revenue from Contracts with Customers.

- 86 -

Fees and commissions revenue by reportable segment and primary service line is as follows for the ~~three~~nine months ended ~~June~~September 30, 2020.

Commercial Consumer Wealth Management Funds Management & Other Consolidated
Out of Scope1
In Scope2
Trading revenue $ 0 $ 0 $ 43,915 $ 0 $ 43,915 $ 43,915 $ 0
Customer hedging revenue 6,893 0 63 (714) 6,242 6,242 0
Retail brokerage revenue 0 0 3,394 0 3,394 0 3,394
Insurance brokerage revenue 0 0 3,153 0 3,153 0 3,153
Investment banking revenue 1,131 0 4,187 0 5,318 851 4,467
Brokerage and trading revenue 8,024 0 54,712 (714) 62,022 51,008 11,014
TransFund EFT network revenue 19,647 556 (9) 0 20,194 0 20,194
Merchant services revenue 2,230 13 0 0 2,243 0 2,243
Corporate card revenue 485 0 18 0 503 0 503
Transaction card revenue 22,362 569 9 0 22,940 0 22,940
Personal trust revenue 0 0 21,681 0 21,681 0 21,681
Corporate trust revenue 0 0 4,604 0 4,604 0 4,604
Institutional trust & retirement plan services revenue 0 0 10,723 191 10,914 0 10,914
Investment management services and other revenue 0 0 4,291 (233) 4,058 0 4,058
Fiduciary and asset management revenue 0 0 41,299 (42) 41,257 0 41,257
Commercial account service charge revenue 11,069 389 598 0 12,056 0 12,056
Overdraft fee revenue 20 3,607 16 0 3,643 0 3,643
Check card revenue 0 5,122 0 0 5,122 0 5,122
Automated service charge and other deposit fee revenue 29 1,179 17 0 1,225 0 1,225
Deposit service charges and fees 11,118 10,297 631 0 22,046 0 22,046
Mortgage production revenue 0 39,186 0 0 39,186 39,186 0
Mortgage servicing revenue 0 15,164 0 (414) 14,750 14,750 0
Mortgage banking revenue 0 54,350 0 (414) 53,936 53,936 0
Other revenue 5,011 1,976 10,106 (5,614) 11,479 8,970 2,509
Total fees and commissions revenue $ 46,515 $ 67,192 $ 106,757 $ (6,784) $ 213,680 $ 113,914 $ 99,766

1 ~~Out of scope revenue generally relates to financial instruments or contractual rights and obligations within the scope of other applicable accounting guidance.~~

2 ~~In scope revenue represents revenue subject to FASB ASC Topic 606,~~ ~~Revenue from Contracts with Customers.~~

~~- 87 -~~

~~Fees and commissions revenue by reportable segment and primary service line is as follows for the six months ended June 30, 2020.~~


		Commercial		Consumer		Wealth Management		Funds Management & Other3		Consolidated		Out of Scope1		In Scope2			Commercial		Consumer		Wealth Management		Funds Management & Other3		Consolidated		Out of Scope1		In Scope2
Trading revenue	Trading revenue	$	0	$	0	$	78,299	$	0	$	78,299	$	78,299	$	0	Trading revenue	$	—	$	—	$	125,189	$	—	$	125,189	$	125,189	$	—
Customer hedging revenue	Customer hedging revenue	9,418		0		198		(151)		9,465		9,465		0		Customer hedging revenue	17,417		—		321		368		18,106		18,106		—
Retail brokerage revenue	Retail brokerage revenue	0		0		7,737		0		7,737		0		7,737		Retail brokerage revenue	—		—		11,524		—		11,524		—		11,524
Insurance brokerage revenue	Insurance brokerage revenue	0		0		6,942		0		6,942		0		6,942		Insurance brokerage revenue	—		—		10,066		—		10,066		—		10,066
Investment banking revenue	Investment banking revenue	3,011		0		7,347		0		10,358		2,679		7,679		Investment banking revenue	5,325		—		12,117		—		17,442		4,959		12,483
Brokerage and trading revenue	Brokerage and trading revenue	12,429		0		100,523		(151)		112,801		90,443		22,358		Brokerage and trading revenue	22,742		—		159,217		368		182,327		148,254		34,073
TransFund EFT network revenue	TransFund EFT network revenue	37,859		1,387		(28)		2		39,220		0		39,220		TransFund EFT network revenue	56,699		2,300		(42)		4		58,961		—		58,961
Merchant services revenue	Merchant services revenue	4,535		27		0		0		4,562		0		4,562		Merchant services revenue	7,554		46		—		—		7,600		—		7,600
Corporate card revenue	Corporate card revenue	1,005		0		34		0		1,039		0		1,039		Corporate card revenue	1,588		—		55		82		1,725		—		1,725
Transaction card revenue	Transaction card revenue	43,399		1,414		6		2		44,821		0		44,821		Transaction card revenue	65,841		2,346		13		86		68,286		—		68,286
Personal trust revenue	Personal trust revenue	0		0		42,330		0		42,330		0		42,330		Personal trust revenue	—		—		62,460		—		62,460		—		62,460
Corporate trust revenue	Corporate trust revenue	0		0		10,966		0		10,966		0		10,966		Corporate trust revenue	—		—		15,579		—		15,579		—		15,579
Institutional trust & retirement plan services revenue	Institutional trust & retirement plan services revenue	0		0		22,480		330		22,810		0		22,810		Institutional trust & retirement plan services revenue	—		—		33,510		—		33,510		—		33,510
Investment management services and other revenue	Investment management services and other revenue	0		0		10,022		(413)		9,609		0		9,609		Investment management services and other revenue	—		—		14,220		(123)		14,097		—		14,097
Fiduciary and asset management revenue	Fiduciary and asset management revenue	0		0		85,798		(83)		85,715		0		85,715		Fiduciary and asset management revenue	—		—		125,769		(123)		125,646		—		125,646
Commercial account service charge revenue	Commercial account service charge revenue	22,108		799		1,143		(1)		24,049		0		24,049		Commercial account service charge revenue	33,317		1,218		1,715		—		36,250		—		36,250
Overdraft fee revenue	Overdraft fee revenue	69		10,812		38		2		10,921		0		10,921		Overdraft fee revenue	101		16,223		54		7		16,385		—		16,385
Check card revenue	Check card revenue	0		10,351		0		0		10,351		0		10,351		Check card revenue	—		15,916		—		—		15,916		—		15,916
Automated service charge and other deposit fee revenue	Automated service charge and other deposit fee revenue	258		2,565		30		2		2,855		0		2,855		Automated service charge and other deposit fee revenue	285		3,572		54		—		3,911		—		3,911
Deposit service charges and fees	Deposit service charges and fees	22,435		24,527		1,211		3		48,176		0		48,176		Deposit service charges and fees	33,703		36,929		1,823		7		72,462		—		72,462
Mortgage production revenue	Mortgage production revenue	0		60,755		0		0		60,755		60,755		0		Mortgage production revenue	—		99,186		—		—		99,186		99,186		—
Mortgage servicing revenue	Mortgage servicing revenue	0		31,206		0		(858)		30,348		30,348		0		Mortgage servicing revenue	—		45,158		—		(1,282)		43,876		43,876		—
Mortgage banking revenue	Mortgage banking revenue	0		91,961		0		(858)		91,103		91,103		0		Mortgage banking revenue	—		144,344		—		(1,282)		143,062		143,062		—
Other revenue	Other revenue	9,711		4,352		17,100		(7,375)		23,788		17,378		6,410		Other revenue	15,773		6,609		29,471		(14,367)		37,486		27,805		9,681
Total fees and commissions revenue	Total fees and commissions revenue	$	87,974	$	122,254	$	204,638	$	(8,462)	$	406,404	$	198,924	$	207,480	Total fees and commissions revenue	$	138,059	$	190,228	$	316,293	$	(15,311)	$	629,269	$	319,121	$	310,148

1 Out of scope revenue generally relates to financial instruments or contractual rights and obligations within the scope of other applicable accounting guidance.

2 In scope revenue represents revenue subject to FASB ASC Topic 606, Revenue from Contracts with Customers.

- 8887 -

(11) Fair Value Measurements

Fair value is defined by applicable accounting guidance as the price to sell an asset or transfer a liability in an orderly transaction between market participants in the principal market for the given asset or liability at the measurement date based on market conditions at that date. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Certain assets and liabilities are recorded in the Company’s financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis.

For some assets and liabilities, observable market transactions and market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. A hierarchy for fair value has been established which categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels are as follows:

Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.

Significant Other Observable Inputs (Level 2) - Fair value is based on significant other observable inputs which are generally determined based on a single price for each financial instrument provided to us by an applicable third-party pricing service and is based on one or more of the following:

•Quoted prices for similar, but not identical, assets or liabilities in active markets;

•Quoted prices for identical or similar assets or liabilities in inactive markets;

•Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates;

•Other inputs derived from or corroborated by observable market inputs.

Significant Unobservable Inputs (Level 3) - Fair value is based upon model-based valuation techniques for which at least one significant assumption is not observable in the market.

Transfers between levels are recognized as of the end of the reporting period. There were no transfers in or out of quoted prices in active markets for identical instruments to significant other observable inputs or significant unobservable inputs during the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. Transfers between significant other observable inputs and significant unobservable inputs during the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 are included in the summary of changes in recurring fair values measured using unobservable inputs.

The underlying methods used by the third-party pricing services are considered in determining the primary inputs used to determine fair values. Management has evaluated the methodologies employed by the third-party pricing services by comparing the price provided by the pricing service with other sources, including brokers' quotes, sales or purchases of similar instruments and discounted cash flows to establish a basis for reliance on the pricing service values. Significant differences between the pricing service provided value and other sources are discussed with the pricing service to understand the basis for their values. Based on all observable inputs, management may adjust prices obtained from third-party pricing services to more appropriately reflect the prices that would be received to sell assets or paid to transfer liabilities in orderly transactions in the current market. No significant adjustments were made to prices provided by third-party pricing services at ~~June~~September 30, 2021 or December 31, 2020.

- 8988 -

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of ~~June~~September 30, 2021 (in thousands):


		Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Trading securities:	Trading securities:									Trading securities:
U.S. government securities	U.S. government securities	$	13,481	$	4,999	$	8,482	$	0	U.S. government securities	$	8,863	$	4,999	$	3,864	$	—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	5,577,986		0		5,577,986		0		Residential agency mortgage-backed securities	5,469,676		—		5,469,676		—
Municipal securities	Municipal securities	49,636		0		49,636		0		Municipal securities	35,894		—		35,894		—

Other trading securities	Other trading securities	57,967		0		57,967		0		Other trading securities	39,607		—		39,607		—
Total trading securities	Total trading securities	5,699,070		4,999		5,694,071		0		Total trading securities	5,554,040		4,999		5,549,041		—
Available for sale securities:	Available for sale securities:									Available for sale securities:
U.S. Treasury	U.S. Treasury	504		504		0		0		U.S. Treasury	502		502		—		—
Municipal securities	Municipal securities	386,509		0		386,509		0		Municipal securities	461,619		—		461,619		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	8,624,876		0		8,624,876		0		Residential agency mortgage-backed securities	8,168,025		—		8,168,025		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	28,261		0		28,261		0		Residential non-agency mortgage-backed securities	26,072		—		26,072		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	4,277,301		0		4,277,301		0		Commercial agency mortgage-backed securities	4,685,423		—		4,685,423		—
Other debt securities	Other debt securities	471		0		0		471		Other debt securities	472		—		—		472
Total available for sale securities	Total available for sale securities	13,317,922		504		13,316,947		471		Total available for sale securities	13,342,113		502		13,341,139		472

Fair value option securities – Residential agency mortgage-backed securities	Fair value option securities – Residential agency mortgage-backed securities	60,432		0		60,432		0		Fair value option securities – Residential agency mortgage-backed securities	51,019		—		51,019		—

Residential mortgage loans held for sale1	Residential mortgage loans held for sale1	200,842		0		195,692		5,150		Residential mortgage loans held for sale1	176,813		—		170,338		6,475
Mortgage servicing rights2	Mortgage servicing rights2	117,629		0		0		117,629		Mortgage servicing rights2	133,308		—		—		133,308
Derivative contracts, net of cash collateral3	Derivative contracts, net of cash collateral3	1,701,443		7,704		1,693,739		0		Derivative contracts, net of cash collateral3	1,901,136		1,109		1,900,027		—
Liabilities:	Liabilities:									Liabilities:
Derivative contracts, net of cash collateral3	Derivative contracts, net of cash collateral3	612,261		218		612,043		0		Derivative contracts, net of cash collateral3	739,641		233,266		506,375		—

1Residential mortgage loans held for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards and are valued at 95.57% of the unpaid principal balance.

2A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 5, Mortgage Banking Activities.

3See Note 3 for detail of fair value of derivative contracts by contract type. Fair values based on quoted prices in active markets for identical instruments (Level 1) are primarily exchange-traded derivative contracts, net of cash margin.

- 9089 -

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of December 31, 2020 (in thousands):


		Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Trading securities:	Trading securities:									Trading securities:
U.S. government securities	U.S. government securities	$	9,183	$	4,999	$	4,184	$	0	U.S. government securities	$	9,183	$	4,999	$	4,184	$	—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	4,669,148		0		4,669,148		0		Residential agency mortgage-backed securities	4,669,148		—		4,669,148		—
Municipal securities	Municipal securities	19,172		0		19,172		0		Municipal securities	19,172		—		19,172		—

Other trading securities	Other trading securities	10,472		0		10,472		0		Other trading securities	10,472		—		10,472		—
Total trading securities	Total trading securities	4,707,975		4,999		4,702,976		0		Total trading securities	4,707,975		4,999		4,702,976		—
Available for sale securities:	Available for sale securities:									Available for sale securities:
U.S. Treasury	U.S. Treasury	508		508		0		0		U.S. Treasury	508		508		—		—
Municipal securities	Municipal securities	167,979		0		167,979		0		Municipal securities	167,979		—		167,979		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	9,340,471		0		9,340,471		0		Residential agency mortgage-backed securities	9,340,471		—		9,340,471		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	32,770		0		32,770		0		Residential non-agency mortgage-backed securities	32,770		—		32,770		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	3,508,465		0		3,508,465		0		Commercial agency mortgage-backed securities	3,508,465		—		3,508,465		—
Other debt securities	Other debt securities	472		0		0		472		Other debt securities	472		—		—		472
Total available for sale securities	Total available for sale securities	13,050,665		508		13,049,685		472		Total available for sale securities	13,050,665		508		13,049,685		472

Fair value option securities — Residential agency mortgage-backed securities	Fair value option securities — Residential agency mortgage-backed securities	114,982		0		114,982		0		Fair value option securities — Residential agency mortgage-backed securities	114,982		—		114,982		—
Residential mortgage loans held for sale1	Residential mortgage loans held for sale1	252,316		0		245,299		7,017		Residential mortgage loans held for sale1	252,316		—		245,299		7,017
Mortgage servicing rights2	Mortgage servicing rights2	101,172		0		0		101,172		Mortgage servicing rights2	101,172		—		—		101,172
Derivative contracts, net of cash collateral3	Derivative contracts, net of cash collateral3	810,688		10,780		799,908		0		Derivative contracts, net of cash collateral3	810,688		10,780		799,908		—
Liabilities:	Liabilities:									Liabilities:
Derivative contracts, net of cash collateral3	Derivative contracts, net of cash collateral3	405,779		0		405,779		0		Derivative contracts, net of cash collateral3	405,779		—		405,779		—

- 9190 -

Following is a description of the Company's valuation methodologies used for assets and liabilities measured on a recurring basis:

Securities

The fair values of trading, available for sale and fair value option securities are based on quoted prices for identical instruments in active markets, when available. If quoted prices for identical instruments are not available, fair values are based on significant other observable inputs such as quoted prices of comparable instruments or interest rates and credit spreads, yield curves, volatilities, prepayment speeds and loss severities. The Company has elected to carry all residential mortgage-backed securities guaranteed by U.S. government agencies held as economic hedges against changes in the fair value of mortgage servicing rights at fair value with changes in the fair value recognized in earnings.

The fair value of certain available for sale municipal and other debt securities may be based on significant unobservable inputs. These significant unobservable inputs include limited observed trades, projected cash flows, current credit rating of the issuers and, when applicable, the insurers of the debt and observed trades of similar debt. Discount rates are primarily based on references to interest rate spreads on comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar securities. A summary of significant inputs used to value these securities follows. A management committee composed of senior members from the Company's Capital Markets, Risk Management and Finance departments assesses the appropriateness of these inputs quarterly.

Derivatives

All derivative instruments are carried on the balance sheet at fair value. Fair values for exchange-traded contracts are based on quoted prices. Fair values for over-the-counter interest rate, commodity and foreign exchange contracts are based on valuations provided either by third-party dealers in the contracts, quotes provided by independent pricing services, or a third-party provided pricing model that uses significant other observable market inputs.

Credit risk is considered in determining the fair value of derivative instruments. Management determines fair value adjustments based on various risk factors including but not limited to current fair value, probability of default and loss given default.

We also consider our own credit risk in determining the fair value of derivative contracts. Changes in our credit rating would affect the fair value of our derivative liabilities. In the event of a credit downgrade, the fair value of our derivative liabilities would increase.

Residential Mortgage Loans Held for Sale

Residential mortgage loans held for sale are carried on the balance sheet at fair value. The Company has elected to carry all residential mortgage loans originated for sale at fair value. Changes in the fair value of these financial instruments are recognized in earnings. The fair values of residential mortgage loans held for sale are based upon quoted market prices of such loans sold in securitization transactions, including related unfunded loan commitments and forward sales contracts. The fair value of mortgage loans that were unable to be sold to U.S. government agencies were determined using quoted prices of loans that are sold in securitization transactions with a liquidity discount applied.

- 9291 -

Fair Value of Assets and Liabilities Measured on a Non-Recurring Basis

Assets measured at fair value on a non-recurring basis include collateral for certain nonaccruing loans and real property and other assets acquired to satisfy loans, which are based primarily on comparisons to completed sales of similar assets.

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at ~~June~~September 30, 2021 for which the fair value was adjusted during the ~~six~~nine months ended ~~June~~September 30, 2021:


								Fair Value Adjustments for the															Fair Value Adjustments for the
		Carrying Value at June 30, 2021						Three Months Ended June 30, 2021 Recognized in:				Six Months Ended June 30, 2021 Recognized in:					Carrying Value at September 30, 2021						Three Months Ended Sept. 30, 2021 Recognized in:				Nine Months Ended Sept. 30, 2021 Recognized in:
		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Other gains (losses), net		Gross charge-offs against allowance for loan losses		Other gains (losses), net			Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Other gains (losses), net		Gross charge-offs against allowance for loan losses		Other gains (losses), net
Nonaccruing loans	Nonaccruing loans	$	0	$	4,730	$	42,453	$	17,362	$	0	$	24,721	$	0	Nonaccruing loans	$	—	$	63	$	12,538	$	6,929	$	—	$	17,466	$	—
Real estate and other repossessed assets	Real estate and other repossessed assets	0		1,706		36,010		0		(3,966)		0		(6,166)		Real estate and other repossessed assets	—		1,706		—		—		—		—		(150)

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at ~~June~~September 30, 2020 for which the fair value was adjusted during the ~~six~~nine months ended ~~June~~September 30, 2020:


								Fair Value Adjustments for the															Fair Value Adjustments for the
		Carrying Value at June 30, 2020						Three Months Ended June 30, 2020 Recognized in:				Six Months Ended June 30, 2020 Recognized in:					Carrying Value at September 30, 2020						Three Months Ended Sept. 30, 2020 Recognized in:				Nine Months Ended Sept. 30, 2020 Recognized in:
		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Other gains (losses), net		Gross charge-offs against allowance for loan losses		Other gains (losses), net			Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Other gains (losses), net		Gross charge-offs against allowance for loan losses		Other gains (losses), net
Nonaccruing loans	Nonaccruing loans	$	0	$	400	$	32,448	$	13,871	$	0	$	29,659	$	0	Nonaccruing loans	$	—	$	396	$	13,001	$	6,371	$	—	$	28,624	$	—
Real estate and other repossessed assets	Real estate and other repossessed assets	0		918		400		0		(5)		0		(131)		Real estate and other repossessed assets	—		16,828		2,993		—		4,370		—		4,452

The fair value of collateral-dependent nonaccruing loans secured by real estate and real estate and other repossessed assets and the related fair value adjustments are generally based on unadjusted third-party appraisals. Our appraisal review policies require appraised values to be supported by observed inputs derived principally from or corroborated by observable market data. Appraisals that are not based on observable inputs or that require significant adjustments or fair value measurements that are not based on third-party appraisals are considered to be based on significant unobservable inputs. Non-recurring fair value measurements of collateral-dependent nonaccruing loans and real estate and other repossessed assets based on significant unobservable inputs are generally due to estimates of current fair values between appraisal dates. Significant unobservable inputs include listing prices for the same or comparable assets, uncorroborated expert opinions or management's knowledge of the collateral or industry. Non-recurring fair value measurements of collateral dependent loans secured by mineral rights are generally determined by our internal staff of engineers on projected cash flows under current market conditions and are based on significant unobservable inputs. Projected cash flows are discounted according to risk characteristics of the underlying oil and gas properties. Assets are evaluated to demonstrate with reasonable certainty that crude oil, natural gas and natural gas liquids can be recovered from known oil and gas reservoirs under existing economic and operating conditions at current prices with existing conventional equipment, operating methods and costs. Significant unobservable inputs are developed by asset management and workout professionals and approved by senior Credit Administration executives.

- 9392 -

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of ~~June~~September 30, 2021 follows (in thousands):

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Nonaccruing loans

~~42,453~~12,538

Discounted cash flows

Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs

4%1% - ~~96% (47%~~97% (23%)1

~~Real estate and other repossessed assets~~

~~36,010~~

~~Discounted cash flows~~

~~Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs~~

~~N/A~~

1 Represents fair value as a percentage of the unpaid principal balance.

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of ~~June~~September 30, 2020 follows (in thousands):

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Nonaccruing loans

~~32,448~~13,001

Discounted cash flows

Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs

0%—% - ~~83% (35%~~73% (18%)1

Real estate and other repossessed assets

~~400~~2,993

~~Appraised value, as adjusted~~Discounted cash flows

~~Marketability adjustments off appraised value~~Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs2

~~87% - 87% (87%)~~N/A

1 Represents fair value as a percentage of the unpaid principal balance.

2 ~~Marketability adjustments include consideration of estimated costs to sell which is approximately 10% of the fair value.~~

- 9493 -

Fair Value of Financial Instruments

The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis as of ~~June~~September 30, 2021 (dollars in thousands):


		Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	Cash and due from banks	$	678,998	$	678,998	$	678,998	$	0	$	0	Cash and due from banks	$	729,285	$	729,285	$	729,285	$	—	$	—
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	580,457		580,457		580,457		0		0		Interest-bearing cash and cash equivalents	1,162,477		1,162,477		1,162,477		—		—
Trading securities:	Trading securities:											Trading securities:
U.S. government securities	U.S. government securities	13,481		13,481		4,999		8,482		0		U.S. government securities	8,863		8,863		4,999		3,864		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	5,577,986		5,577,986		0		5,577,986		0		Residential agency mortgage-backed securities	5,469,676		5,469,676		—		5,469,676		—
Municipal securities	Municipal securities	49,636		49,636		0		49,636		0		Municipal securities	35,894		35,894		—		35,894		—

Other trading securities	Other trading securities	57,967		57,967		0		57,967		0		Other trading securities	39,607		39,607		—		39,607		—
Total trading securities	Total trading securities	5,699,070		5,699,070		4,999		5,694,071		0		Total trading securities	5,554,040		5,554,040		4,999		5,549,041		—
Investment securities:	Investment securities:											Investment securities:
Municipal securities	Municipal securities	211,725		235,697		0		64,401		171,296		Municipal securities	207,393		229,149		—		61,682		167,467
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	7,863		8,601		0		8,601		0		Residential agency mortgage-backed securities	7,412		8,084		—		8,084		—
Other debt securities	Other debt securities	1,737		1,736		0		1,736		0		Other debt securities	1,257		1,256		—		1,256		—
Total investment securities	Total investment securities	221,325		246,034		0		74,738		171,296		Total investment securities	216,062		238,489		—		71,022		167,467
Allowance for credit losses	Allowance for credit losses	(493)		0		0		0		0		Allowance for credit losses	(470)		—		—		—		—
Investment securities, net of allowance	Investment securities, net of allowance	220,832		246,034		0		74,738		171,296		Investment securities, net of allowance	215,592		238,489		—		71,022		167,467
Available for sale securities:	Available for sale securities:											Available for sale securities:
U.S. Treasury	U.S. Treasury	504		504		504		0		0		U.S. Treasury	502		502		502		—		—
Municipal securities	Municipal securities	386,509		386,509		0		386,509		0		Municipal securities	461,619		461,619		—		461,619		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	8,624,876		8,624,876		0		8,624,876		0		Residential agency mortgage-backed securities	8,168,025		8,168,025		—		8,168,025		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	28,261		28,261		0		28,261		0		Residential non-agency mortgage-backed securities	26,072		26,072		—		26,072		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	4,277,301		4,277,301		0		4,277,301		0		Commercial agency mortgage-backed securities	4,685,423		4,685,423		—		4,685,423		—
Other debt securities	Other debt securities	471		471		0		0		471		Other debt securities	472		472		—		—		472
Total available for sale securities	Total available for sale securities	13,317,922		13,317,922		504		13,316,947		471		Total available for sale securities	13,342,113		13,342,113		502		13,341,139		472

Fair value option securities – Residential agency mortgage-backed securities	Fair value option securities – Residential agency mortgage-backed securities	60,432		60,432		0		60,432		0		Fair value option securities – Residential agency mortgage-backed securities	51,019		51,019		—		51,019		—

Residential mortgage loans held for sale	Residential mortgage loans held for sale	200,842		200,842		0		195,692		5,150		Residential mortgage loans held for sale	176,813		176,813		—		170,338		6,475
Loans:	Loans:											Loans:
Commercial	Commercial	12,472,907		12,357,430		0		0		12,357,430		Commercial	12,175,140		12,054,326		—		—		12,054,326
Commercial real estate	Commercial real estate	4,246,992		4,192,793		0		0		4,192,793		Commercial real estate	4,116,892		4,085,030		—		—		4,085,030
Paycheck protection program	Paycheck protection program	1,121,583		1,107,172		0		0		1,107,172		Paycheck protection program	536,052		525,990		—		—		525,990
Loans to individuals	Loans to individuals	3,574,967		3,570,855		0		0		3,570,855		Loans to individuals	3,519,852		3,519,309		—		—		3,519,309
Total loans	Total loans	21,416,449		21,228,250		0		0		21,228,250		Total loans	20,347,936		20,184,655		—		—		20,184,655
Allowance for loan losses	Allowance for loan losses	(311,890)		0		0		0		0		Allowance for loan losses	(276,680)		—		—		—		—
Loans, net of allowance	Loans, net of allowance	21,104,559		21,228,250		0		0		21,228,250		Loans, net of allowance	20,071,256		20,184,655		—		—		20,184,655
Mortgage servicing rights	Mortgage servicing rights	117,629		117,629		0		0		117,629		Mortgage servicing rights	133,308		133,308		—		—		133,308
Derivative instruments with positive fair value, net of cash collateral	Derivative instruments with positive fair value, net of cash collateral	1,701,443		1,701,443		7,704		1,693,739		0		Derivative instruments with positive fair value, net of cash collateral	1,901,136		1,901,136		1,109		1,900,027		—
Deposits with no stated maturity	Deposits with no stated maturity	35,534,584		35,534,584		0		0		35,534,584		Deposits with no stated maturity	36,743,836		36,743,836		—		—		36,743,836
Time deposits	Time deposits	1,905,349		1,908,847		0		0		1,908,847		Time deposits	1,780,715		1,783,165		—		—		1,783,165
Other borrowed funds	Other borrowed funds	2,276,414		2,273,466		0		0		2,273,466		Other borrowed funds	880,699		877,709		—		—		877,709
Subordinated debentures	Subordinated debentures	276,043		291,334		0		291,334		0		Subordinated debentures	131,220		143,381		—		143,381		—
Derivative instruments with negative fair value, net of cash collateral	Derivative instruments with negative fair value, net of cash collateral	612,261		612,261		218		612,043		0		Derivative instruments with negative fair value, net of cash collateral	739,641		739,641		233,266		506,375		—

- 9594 -


		Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	Cash and due from banks	$	798,757	$	798,757	$	798,757	$	0	$	0	Cash and due from banks	$	798,757	$	798,757	$	798,757	$	—	$	—
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	381,816		381,816		381,816		0		0		Interest-bearing cash and cash equivalents	381,816		381,816		381,816		—		—
Trading securities:	Trading securities:											Trading securities:
U.S. government securities	U.S. government securities	9,183		9,183		4,999		4,184		0		U.S. government securities	9,183		9,183		4,999		4,184		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	4,669,148		4,669,148		0		4,669,148		0		Residential agency mortgage-backed securities	4,669,148		4,669,148		—		4,669,148		—
Municipal securities	Municipal securities	19,172		19,172		0		19,172		0		Municipal securities	19,172		19,172		—		19,172		—

Other trading securities	Other trading securities	10,472		10,472		0		10,472		0		Other trading securities	10,472		10,472		—		10,472		—
Total trading securities	Total trading securities	4,707,975		4,707,975		4,999		4,702,976		0		Total trading securities	4,707,975		4,707,975		4,999		4,702,976		—
Investment securities:	Investment securities:											Investment securities:
Municipal securities	Municipal securities	229,245		255,270		0		69,404		185,866		Municipal securities	229,245		255,270		—		69,404		185,866
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	8,913		9,790		0		9,790		0		Residential agency mortgage-backed securities	8,913		9,790		—		9,790		—
Other debt securities	Other debt securities	7,373		7,371		0		7,371		0		Other debt securities	7,373		7,371		—		7,371		—
Total investment securities	Total investment securities	245,531		272,431		0		86,565		185,866		Total investment securities	245,531		272,431		—		86,565		185,866
Allowance for credit losses	Allowance for credit losses	(688)		0		0		0		0		Allowance for credit losses	(688)		—		—		—		—
Investment securities, net of allowance	Investment securities, net of allowance	244,843		272,431		0		86,565		185,866		Investment securities, net of allowance	244,843		272,431		—		86,565		185,866
Available for sale securities:	Available for sale securities:											Available for sale securities:
U.S. Treasury	U.S. Treasury	508		508		508		0		0		U.S. Treasury	508		508		508		—		—
Municipal securities	Municipal securities	167,979		167,979		0		167,979		0		Municipal securities	167,979		167,979		—		167,979		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	9,340,471		9,340,471		0		9,340,471		0		Residential agency mortgage-backed securities	9,340,471		9,340,471		—		9,340,471		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	32,770		32,770		0		32,770		0		Residential non-agency mortgage-backed securities	32,770		32,770		—		32,770		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	3,508,465		3,508,465		0		3,508,465		0		Commercial agency mortgage-backed securities	3,508,465		3,508,465		—		3,508,465		—
Other debt securities	Other debt securities	472		472		0		0		472		Other debt securities	472		472		—		—		472
Total available for sale securities	Total available for sale securities	13,050,665		13,050,665		508		13,049,685		472		Total available for sale securities	13,050,665		13,050,665		508		13,049,685		472

Fair value option securities — Residential agency mortgage-backed securities	Fair value option securities — Residential agency mortgage-backed securities	114,982		114,982		0		114,982		0		Fair value option securities — Residential agency mortgage-backed securities	114,982		114,982		—		114,982		—
Residential mortgage loans held for sale	Residential mortgage loans held for sale	252,316		252,316		0		245,299		7,017		Residential mortgage loans held for sale	252,316		252,316		—		245,299		7,017
Loans:	Loans:											Loans:
Commercial	Commercial	13,077,535		13,003,383		0		0		13,003,383		Commercial	13,077,535		13,003,383		—		—		13,003,383
Commercial real estate	Commercial real estate	4,698,538		4,649,763		0		0		4,649,763		Commercial real estate	4,698,538		4,649,763		—		—		4,649,763
Paycheck protection program	Paycheck protection program	1,682,310		1,669,461		0		0		1,669,461		Paycheck protection program	1,682,310		1,669,461		—		—		1,669,461
Loans to individuals	Loans to individuals	3,549,137		3,563,199		0		0		3,563,199		Loans to individuals	3,549,137		3,563,199		—		—		3,563,199
Total loans	Total loans	23,007,520		22,885,806		0		0		22,885,806		Total loans	23,007,520		22,885,806		—		—		22,885,806
Allowance for loan losses	Allowance for loan losses	(388,640)		0		0		0		0		Allowance for loan losses	(388,640)		—		—		—		—
Loans, net of allowance	Loans, net of allowance	22,618,880		22,885,806		0		0		22,885,806		Loans, net of allowance	22,618,880		22,885,806		—		—		22,885,806
Mortgage servicing rights	Mortgage servicing rights	101,172		101,172		0		0		101,172		Mortgage servicing rights	101,172		101,172		—		—		101,172
Derivative instruments with positive fair value, net of cash collateral	Derivative instruments with positive fair value, net of cash collateral	810,688		810,688		10,780		799,908		0		Derivative instruments with positive fair value, net of cash collateral	810,688		810,688		10,780		799,908		—
Deposits with no stated maturity	Deposits with no stated maturity	34,176,752		34,176,752		0		0		34,176,752		Deposits with no stated maturity	34,176,752		34,176,752		—		—		34,176,752
Time deposits	Time deposits	1,967,128		1,976,936		0		0		1,976,936		Time deposits	1,967,128		1,976,936		—		—		1,976,936
Other borrowed funds	Other borrowed funds	3,545,356		3,542,489		0		0		3,542,489		Other borrowed funds	3,545,356		3,542,489		—		—		3,542,489
Subordinated debentures	Subordinated debentures	276,005		269,544		0		269,544		0		Subordinated debentures	276,005		269,544		—		269,544		—
Derivative instruments with negative fair value, net of cash collateral	Derivative instruments with negative fair value, net of cash collateral	405,779		405,779		0		405,779		0		Derivative instruments with negative fair value, net of cash collateral	405,779		405,779		—		405,779		—

Because no market exists for certain of these financial instruments and management does not intend to sell these financial instruments, the fair values shown in the tables above may not represent values at which the respective financial instruments could be sold individually or in the aggregate at the given reporting date.

- 9695 -

(12) Subsequent Events

The Company evaluated events from the date of the consolidated financial statements on ~~June~~September 30, 2021 through the issuance of those consolidated financial statements included in this Quarterly Report on Form 10-Q. On July 23, 2021, the Company notified holders that it will exercise its option to redeem all $150 million of its 5.375 percent Subordinated Notes on August 23, 2021. The Company will use existing capital for the redemption. No ~~additional~~ events were identified requiring recognition in and/or disclosure in the consolidated financial statements.

- 9796 -

~~Six-Month~~Nine-Month Financial Summary – Unaudited

Consolidated Daily Average Balances, Average Yields and Rates


(In Thousands, Except Per Share Data)	(In Thousands, Except Per Share Data)	Six Months Ended												(In Thousands, Except Per Share Data)	Nine Months Ended
		June 30, 2021						June 30, 2020							September 30, 2021						September 30, 2020
		Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate			Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate
Assets	Assets													Assets
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	$	685,037	$	332	0.10	%	$	670,698	$	2,505	0.75	%	Interest-bearing cash and cash equivalents	$	684,279	$	577	0.11	%	$	631,203	$	2,672	0.57	%
Trading securities	Trading securities	7,198,206		72,671		2.00	%	1,780,875		23,328		2.66	%	Trading securities	7,339,417		111,677		2.02	%	1,798,767		32,094		2.41	%
Investment securities	Investment securities	229,313		5,664		4.94	%	275,606		6,548		4.75	%	Investment securities	225,541		8,404		4.97	%	270,018		9,689		4.78	%
Available for sale securities	Available for sale securities	13,338,129		117,669		1.84	%	12,072,293		138,086		2.39	%	Available for sale securities	13,374,513		175,060		1.83	%	12,243,049		200,519		2.29	%
Fair value option securities	Fair value option securities	84,653		898		2.20	%	1,290,119		15,818		2.46	%	Fair value option securities	75,101		1,240		2.31	%	987,145		17,804		2.39	%
Restricted equity securities	Restricted equity securities	199,358		3,110		3.12	%	351,527		7,774		4.42	%	Restricted equity securities	214,903		4,675		2.90	%	281,986		8,687		4.11	%
Residential mortgage loans held for sale	Residential mortgage loans held for sale	212,638		2,949		2.81	%	209,149		3,263		3.23	%	Residential mortgage loans held for sale	197,466		4,223		2.89	%	210,484		4,848		3.15	%
Loans	Loans	22,460,418		395,460		3.55	%	23,021,258		463,344		4.05	%	Loans	21,917,244		588,577		3.59	%	23,386,976		681,469		3.89	%
Allowance for loan losses	Allowance for loan losses	(363,898)						(308,961)						Allowance for loan losses	(344,429)						(353,574)
Loans, net of allowance	Loans, net of allowance	22,096,520		395,460		3.61	%	22,712,297		463,344		4.10	%	Loans, net of allowance	21,572,815		588,577		3.65	%	23,033,402		681,469		3.95	%
Total earning assets	Total earning assets	44,043,854		598,753		2.77	%	39,362,564		660,666		3.42	%	Total earning assets	43,684,035		894,433		2.77	%	39,456,054		957,782		3.29	%
Receivable on unsettled securities sales	Receivable on unsettled securities sales	726,039						3,836,209						Receivable on unsettled securities sales	694,530						4,080,342
Cash and other assets	Cash and other assets	5,483,570						4,540,052						Cash and other assets	5,620,697						4,602,974
Total assets	Total assets	$	50,253,463					$	47,738,825					Total assets	$	49,999,262					$	48,139,370
Liabilities and equity	Liabilities and equity													Liabilities and equity
Interest-bearing deposits:	Interest-bearing deposits:													Interest-bearing deposits:
Transaction	Transaction	$	21,462,436	$	11,862	0.11	%	$	17,099,912	$	45,178	0.53	%	Transaction	$	21,453,439	$	16,864	0.11	%	$	17,990,429	$	53,377	0.40	%
Savings	Savings	831,366		182		0.04	%	610,245		210		0.07	%	Savings	850,455		278		0.04	%	642,773		298		0.06	%
Time	Time	1,961,329		6,231		0.64	%	2,352,014		18,516		1.58	%	Time	1,920,436		8,798		0.61	%	2,318,101		24,887		1.43	%
Total interest-bearing deposits	Total interest-bearing deposits	24,255,131		18,275		0.15	%	20,062,171		63,904		0.64	%	Total interest-bearing deposits	24,224,330		25,940		0.14	%	20,951,303		78,562		0.50	%
Funds purchased and repurchase agreements	Funds purchased and repurchase agreements	2,307,562		2,070		0.18	%	4,816,213		12,880		0.54	%	Funds purchased and repurchase agreements	2,018,162		2,792		0.18	%	4,133,243		14,079		0.45	%
Other borrowings	Other borrowings	3,500,953		6,358		0.37	%	5,034,813		31,901		1.27	%	Other borrowings	3,179,166		8,702		0.37	%	4,480,085		35,558		1.06	%
Subordinated debentures	Subordinated debentures	276,025		6,700		4.89	%	275,940		7,172		5.23	%	Subordinated debentures	255,343		9,205		4.82	%	275,954		10,567		5.11	%
Total interest-bearing liabilities	Total interest-bearing liabilities	30,339,671		33,403		0.22	%	30,189,137		115,857		0.77	%	Total interest-bearing liabilities	29,677,001		46,639		0.21	%	29,840,585		138,766		0.62	%
Non-interest bearing demand deposits	Non-interest bearing demand deposits	12,753,715						10,361,090						Non-interest bearing demand deposits	13,062,720						10,887,775
Due on unsettled securities purchases	Due on unsettled securities purchases	807,862						924,377						Due on unsettled securities purchases	858,302						1,123,319
Other liabilities	Other liabilities	1,050,157						1,274,430						Other liabilities	1,051,535						1,239,723
Total equity	Total equity	5,302,058						4,989,791						Total equity	5,349,704						5,047,968
Total liabilities and equity	Total liabilities and equity	$	50,253,463					$	47,738,825					Total liabilities and equity	$	49,999,262					$	48,139,370
Tax-equivalent Net Interest Revenue	Tax-equivalent Net Interest Revenue			$	565,350	2.55	%			$	544,809	2.65	%	Tax-equivalent Net Interest Revenue			$	847,794	2.56	%			$	819,016	2.67	%
Tax-equivalent Net Interest Revenue to Earning Assets	Tax-equivalent Net Interest Revenue to Earning Assets					2.61	%					2.82	%	Tax-equivalent Net Interest Revenue to Earning Assets					2.63	%					2.81	%
Less tax-equivalent adjustment	Less tax-equivalent adjustment			4,621						5,345				Less tax-equivalent adjustment			6,838						7,802
Net Interest Revenue	Net Interest Revenue			560,729						539,464				Net Interest Revenue			840,956						811,214
Provision for credit losses	Provision for credit losses			(60,000)						229,092				Provision for credit losses			(83,000)						229,092
Other operating revenue	Other operating revenue			368,500						413,594				Other operating revenue			598,332						643,532
Other operating expense	Other operating expense			586,936						564,593				Other operating expense			878,213						861,637
Income before taxes	Income before taxes			402,293						159,373				Income before taxes			644,075						364,017
Federal and state income taxes	Federal and state income taxes			90,878						33,103				Federal and state income taxes			144,939						83,655
Net income	Net income			311,415						126,270				Net income			499,136						280,362
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests			(1,066)						(502)				Net income (loss) attributable to non-controlling interests			(1,667)						(444)
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders			$	312,481					$	126,772			Net income attributable to BOK Financial Corp. shareholders			$	500,803					$	280,806
Earnings Per Average Common Share Equivalent:	Earnings Per Average Common Share Equivalent:													Earnings Per Average Common Share Equivalent:
Net income:	Net income:													Net income:
Basic	Basic			$	4.50					$	1.80			Basic			$	7.23					$	3.99
Diluted	Diluted			$	4.50					$	1.80			Diluted			$	7.23					$	3.99

Yield calculations are shown on a tax equivalent at the statutory federal and state rates for the periods presented. The yield calculations exclude security trades that have been recorded on trade date with no corresponding interest income and the unrealized gains and losses. The yield calculation also includes average loan balances for which the accrual of interest has been discontinued and are net of unearned income. Yield / rate calculations are generally based on the conventions that determine how interest income and expense is accrued.

- 97 -

Quarterly Financial Summary – Unaudited

Consolidated Daily Average Balances, Average Yields and Rates


(In Thousands, Except Per Share Data)	Three Months Ended
	September 30, 2021						June 30, 2021
	Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate
Assets
Interest-bearing cash and cash equivalents	$	682,788	$	245	0.14	%	$	659,312	$	158	0.10	%
Trading securities	7,617,236		39,006		2.04	%	7,430,217		36,702		1.95	%
Investment securities, net of allowance	218,117		2,740		5.02	%	221,401		2,771		5.01	%
Available for sale securities	13,446,095		57,391		1.80	%	13,243,542		58,989		1.85	%
Fair value option securities	56,307		342		2.62	%	64,864		402		2.60	%
Restricted equity securities	245,485		1,565		2.55	%	208,692		1,751		3.36	%
Residential mortgage loans held for sale	167,620		1,274		3.06	%	218,200		1,569		2.91	%
Loans	20,848,608		193,117		3.68	%	22,167,089		195,871		3.54	%
Allowance for loan losses	(306,125)						(345,269)
Loans, net of allowance	20,542,483		193,117		3.73	%	21,821,820		195,871		3.60	%
Total earning assets	42,976,131		295,680		2.78	%	43,868,048		298,213		2.75	%
Receivable on unsettled securities sales	632,539						716,700
Cash and other assets	5,890,479						5,612,174
Total assets	$	49,499,149					$	50,196,922
Liabilities and equity
Interest-bearing deposits:
Transaction	$	21,435,736	$	5,002	0.09	%	$	21,491,145	$	5,539	0.10	%
Savings	888,011		96		0.04	%	872,618		96		0.04	%
Time	1,839,983		2,567		0.55	%	1,936,510		2,790		0.58	%
Total interest-bearing deposits	24,163,730		7,665		0.13	%	24,300,273		8,425		0.14	%
Funds purchased and repurchase agreements	1,448,800		722		0.20	%	1,790,490		722		0.16	%
Other borrowings	2,546,083		2,344		0.37	%	3,608,369		3,084		0.34	%
Subordinated debentures	214,654		2,505		4.63	%	276,034		3,353		4.87	%
Total interest-bearing liabilities	28,373,267		13,236		0.19	%	29,975,166		15,584		0.21	%
Non-interest bearing demand deposits	13,670,656						13,189,954
Due on unsettled securities purchases	957,538						701,495
Other liabilities	1,054,247						1,000,662
Total equity	5,443,441						5,329,645
Total liabilities and equity	$	49,499,149					$	50,196,922
Tax-equivalent Net Interest Revenue			$	282,444	2.59	%			$	282,629	2.54	%
Tax-equivalent Net Interest Revenue to Earning Assets					2.66	%					2.60	%
Less tax-equivalent adjustment			2,217						2,320
Net Interest Revenue			280,227						280,309
Provision for credit losses			(23,000)						(35,000)
Other operating revenue			229,832						191,446
Other operating expense			291,277						291,152
Income before taxes			241,782						215,603
Federal and state income taxes			54,061						48,496
Net income			187,721						167,107
Net income (loss) attributable to non-controlling interests			(601)						686
Net income attributable to BOK Financial Corp. shareholders			$	188,322					$	166,421
Earnings Per Average Common Share Equivalent:
Basic			$	2.74					$	2.40
Diluted			$	2.74					$	2.40

- 98 -

~~Quarterly Financial Summary – Unaudited~~

~~Consolidated Daily Average Balances, Average Yields and Rates~~

(In Thousands, Except Per Share Data) Three Months Ended
June 30, 2021 March 31, 2021
Average
Balance Revenue/
Expense Yield/
Rate Average
Balance Revenue/
Expense Yield/
Rate
Assets
Interest-bearing cash and cash equivalents $ 659,312 $ 158 0.10 % $ 711,047 $ 174 0.10 %
Trading securities 7,430,217 36,702 1.95 % 6,963,617 35,969 2.06 %
Investment securities, net of allowance 221,401 2,771 5.01 % 237,313 2,893 4.88 %
Available for sale securities 13,243,542 58,989 1.85 % 13,433,767 58,680 1.84 %
Fair value option securities 64,864 402 2.60 % 104,662 496 1.95 %
Restricted equity securities 208,692 1,751 3.36 % 189,921 1,359 2.86 %
Residential mortgage loans held for sale 218,200 1,569 2.91 % 207,013 1,380 2.71 %
Loans 22,167,089 195,871 3.54 % 22,757,007 199,589 3.55 %
Allowance for loan losses (345,269) (382,734)
Loans, net of allowance 21,821,820 195,871 3.60 % 22,374,273 199,589 3.62 %
Total earning assets 43,868,048 298,213 2.75 % 44,221,613 300,540 2.78 %
Receivable on unsettled securities sales 716,700 735,482
Cash and other assets 5,612,174 5,353,538
Total assets $ 50,196,922 $ 50,310,633
Liabilities and equity
Interest-bearing deposits:
Transaction $ 21,491,145 $ 5,539 0.10 % $ 21,433,406 $ 6,323 0.12 %
Savings 872,618 96 0.04 % 789,656 86 0.04 %
Time 1,936,510 2,790 0.58 % 1,986,425 3,441 0.70 %
Total interest-bearing deposits 24,300,273 8,425 0.14 % 24,209,487 9,850 0.17 %
Funds purchased and repurchase agreements 1,790,490 722 0.16 % 2,830,378 1,348 0.19 %
Other borrowings 3,608,369 3,084 0.34 % 3,392,346 3,274 0.39 %
Subordinated debentures 276,034 3,353 4.87 % 276,015 3,347 4.92 %
Total interest-bearing liabilities 29,975,166 15,584 0.21 % 30,708,226 17,819 0.24 %
Non-interest bearing demand deposits 13,189,954 12,312,629
Due on unsettled securities purchases 701,495 915,410
Other liabilities 1,000,662 1,100,203
Total equity 5,329,645 5,274,165
Total liabilities and equity $ 50,196,922 $ 50,310,633
Tax-equivalent Net Interest Revenue $ 282,629 2.54 % $ 282,721 2.54 %
Tax-equivalent Net Interest Revenue to Earning Assets 2.60 % 2.62 %
Less tax-equivalent adjustment 2,320 2,301
Net Interest Revenue 280,309 280,420
Provision for credit losses (35,000) (25,000)
Other operating revenue 191,446 177,054
Other operating expense 291,152 295,784
Income before taxes 215,603 186,690
Federal and state income taxes 48,496 42,382
Net income 167,107 144,308
Net income (loss) attributable to non-controlling interests 686 (1,752)
Net income attributable to BOK Financial Corp. shareholders $ 166,421 $ 146,060
Earnings Per Average Common Share Equivalent:
Basic $ 2.40 $ 2.10
Diluted $ 2.40 $ 2.10

~~- 99 -~~

Three Months Ended
December 31, 2020 September 30, 2020 June 30, 2020
Average Balance Revenue /Expense Yield / Rate Average Balance Revenue / Expense Yield / Rate Average Balance Revenue / Expense Yield / Rate
$ 643,926 $ 158 0.10 % $ 553,070 $ 167 0.12 % $ 619,737 $ 112 0.07 %
6,888,189 35,848 2.02 % 1,834,160 8,766 1.92 % 1,871,647 11,473 2.46 %
251,863 3,071 4.88 % 258,965 3,141 4.85 % 268,947 3,210 4.77 %
12,949,702 60,885 1.98 % 12,580,850 62,433 2.11 % 12,480,065 68,358 2.29 %
122,329 671 2.27 % 387,784 1,986 1.92 % 786,757 4,110 2.00 %
280,428 2,276 3.25 % 144,415 913 2.53 % 273,922 1,880 2.75 %
229,631 1,549 2.75 % 213,125 1,585 3.01 % 288,588 2,140 3.10 %
23,447,518 216,976 3.68 % 24,110,463 218,125 3.60 % 24,099,492 217,731 3.63 %
(414,225) (441,831) (367,583)
23,033,293 216,976 3.75 % 23,668,632 218,125 3.67 % 23,731,909 217,731 3.69 %
44,399,361 321,434 2.92 % 39,641,001 297,116 3.04 % 40,321,572 309,014 3.12 %
1,094,198 4,563,301 4,626,307
4,893,605 4,727,453 4,809,152
$ 50,387,164 $ 48,931,755 $ 49,757,031
$ 20,718,390 $ 7,047 0.14 % $ 19,752,106 $ 8,199 0.17 % $ 18,040,170 $ 9,321 0.21 %
737,360 87 0.05 % 707,121 88 0.05 % 656,669 84 0.05 %
1,930,808 4,300 0.89 % 2,251,012 6,371 1.13 % 2,464,793 8,340 1.36 %
23,386,558 11,434 0.19 % 22,710,239 14,658 0.26 % 21,161,632 17,745 0.34 %
2,153,254 1,526 0.28 % 2,782,150 1,199 0.17 % 5,816,484 2,042 0.14 %
5,193,656 5,453 0.42 % 3,382,688 3,657 0.43 % 3,527,303 4,954 0.56 %
275,998 3,377 4.87 % 275,980 3,395 4.89 % 275,949 3,539 5.16 %
31,009,466 21,790 0.28 % 29,151,057 22,909 0.31 % 30,781,368 28,280 0.37 %
12,136,071 11,929,694 11,489,322
957,642 1,516,880 887,973
1,055,623 1,171,064 1,526,754
5,228,362 5,163,060 5,071,614
$ 50,387,164 $ 48,931,755 $ 49,757,031
$ 299,644 2.64 % $ 274,207 2.73 % $ 280,734 2.75 %
2.72 % 2.81 % 2.83 %
2,414 2,457 2,630
297,230 271,750 278,104
(6,500) — 135,321
198,789 229,938 233,272
302,672 297,044 295,966
199,847 204,644 80,089
45,138 50,552 15,803
154,709 154,092 64,286
485 58 (407)
$ 154,224 $ 154,034 $ 64,693
$ 2.21 $ 2.19 $ 0.92
$ 2.21 $ 2.19 $ 0.92


Three Months Ended
March 31, 2021						December 31, 2020						September 30, 2020
Average Balance		Revenue /Expense		Yield / Rate		Average Balance		Revenue / Expense		Yield / Rate		Average Balance		Revenue / Expense		Yield / Rate

$	711,047	$	174	0.10	%	$	643,926	$	158	0.10	%	$	553,070	$	167	0.12	%
6,963,617		35,969		2.06	%	6,888,189		35,848		2.02	%	1,834,160		8,766		1.92	%
237,313		2,893		4.88	%	251,863		3,071		4.88	%	258,965		3,141		4.85	%
13,433,767		58,680		1.84	%	12,949,702		60,885		1.98	%	12,580,850		62,433		2.11	%
104,662		496		1.95	%	122,329		671		2.27	%	387,784		1,986		1.92	%
189,921		1,359		2.86	%	280,428		2,276		3.25	%	144,415		913		2.53	%
207,013		1,380		2.71	%	229,631		1,549		2.75	%	213,125		1,585		3.01	%
22,757,007		199,589		3.55	%	23,447,518		216,976		3.68	%	24,110,463		218,125		3.60	%
(382,734)						(414,225)						(441,831)
22,374,273		199,589		3.62	%	23,033,293		216,976		3.75	%	23,668,632		218,125		3.67	%
44,221,613		300,540		2.78	%	44,399,361		321,434		2.92	%	39,641,001		297,116		3.04	%
735,482						1,094,198						4,563,301
5,353,538						4,893,605						4,727,453
$	50,310,633					$	50,387,164					$	48,931,755


$	21,433,406	$	6,323	0.12	%	$	20,718,390	$	7,047	0.14	%	$	19,752,106	$	8,199	0.17	%
789,656		86		0.04	%	737,360		87		0.05	%	707,121		88		0.05	%
1,986,425		3,441		0.70	%	1,930,808		4,300		0.89	%	2,251,012		6,371		1.13	%
24,209,487		9,850		0.17	%	23,386,558		11,434		0.19	%	22,710,239		14,658		0.26	%
2,830,378		1,348		0.19	%	2,153,254		1,526		0.28	%	2,782,150		1,199		0.17	%
3,392,346		3,274		0.39	%	5,193,656		5,453		0.42	%	3,382,688		3,657		0.43	%
276,015		3,347		4.92	%	275,998		3,377		4.87	%	275,980		3,395		4.89	%
30,708,226		17,819		0.24	%	31,009,466		21,790		0.28	%	29,151,057		22,909		0.31	%
12,312,629						12,136,071						11,929,694
915,410						957,642						1,516,880
1,100,203						1,055,623						1,171,064
5,274,165						5,228,362						5,163,060
$	50,310,633					$	50,387,164					$	48,931,755
		$	282,721	2.54	%			$	299,644	2.64	%			$	274,207	2.73	%
				2.62	%					2.72	%					2.81	%
		2,301						2,414						2,457
		280,420						297,230						271,750
		(25,000)						(6,500)						—
		177,054						198,789						229,938
		295,784						302,672						297,044
		186,690						199,847						204,644
		42,382						45,138						50,552
		144,308						154,709						154,092
		(1,752)						485						58
		$	146,060					$	154,224					$	154,034

		$	2.10					$	2.21					$	2.19
		$	2.10					$	2.21					$	2.19

- ~~100~~99 -

Quarterly Earnings Trends – Unaudited

(In thousands, except share and per share data)


		Three Months Ended											Three Months Ended
		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020		June 30, 2020			Sept. 30, 2021		June 30, 2021		Mar. 31, 2021		Dec. 31, 2020		Sept. 30, 2020

Interest revenue	Interest revenue	$	295,893	$	298,239	$	319,020	$	294,659	$	306,384	Interest revenue	$	293,463	$	295,893	$	298,239	$	319,020	$	294,659
Interest expense	Interest expense	15,584		17,819		21,790		22,909		28,280		Interest expense	13,236		15,584		17,819		21,790		22,909
Net interest revenue	Net interest revenue	280,309		280,420		297,230		271,750		278,104		Net interest revenue	280,227		280,309		280,420		297,230		271,750
Provision for credit losses	Provision for credit losses	(35,000)		(25,000)		(6,500)		—		135,321		Provision for credit losses	(23,000)		(35,000)		(25,000)		(6,500)		—
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	315,309		305,420		303,730		271,750		142,783		Net interest revenue after provision for credit losses	303,227		315,309		305,420		303,730		271,750
Other operating revenue	Other operating revenue											Other operating revenue
Brokerage and trading revenue	Brokerage and trading revenue	29,408		20,782		39,506		69,526		62,022		Brokerage and trading revenue	47,930		29,408		20,782		39,506		69,526
Transaction card revenue	Transaction card revenue	24,923		22,430		21,896		23,465		22,940		Transaction card revenue	24,632		24,923		22,430		21,896		23,465
Fiduciary and asset management revenue	Fiduciary and asset management revenue	44,832		41,322		41,799		39,931		41,257		Fiduciary and asset management revenue	45,248		44,832		41,322		41,799		39,931
Deposit service charges and fees	Deposit service charges and fees	25,861		24,209		24,343		24,286		22,046		Deposit service charges and fees	27,429		25,861		24,209		24,343		24,286
Mortgage banking revenue	Mortgage banking revenue	21,219		37,113		39,298		51,959		53,936		Mortgage banking revenue	26,286		21,219		37,113		39,298		51,959
Other revenue	Other revenue	23,172		16,296		14,209		13,698		11,479		Other revenue	18,896		23,172		16,296		14,209		13,698
Total fees and commissions	Total fees and commissions	169,415		162,152		181,051		222,865		213,680		Total fees and commissions	190,421		169,415		162,152		181,051		222,865

Other gains, net	Other gains, net	16,449		10,121		7,394		2,044		7,347		Other gains, net	31,091		16,449		10,121		7,394		2,044
Gain (loss) on derivatives, net	Gain (loss) on derivatives, net	18,820		(27,650)		(339)		2,354		21,885		Gain (loss) on derivatives, net	(5,760)		18,820		(27,650)		(339)		2,354
Gain (loss) on fair value option securities, net	Gain (loss) on fair value option securities, net	(1,627)		(1,910)		68		(754)		(14,459)		Gain (loss) on fair value option securities, net	(120)		(1,627)		(1,910)		68		(754)
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	(13,041)		33,874		6,276		3,441		(761)		Change in fair value of mortgage servicing rights	12,945		(13,041)		33,874		6,276		3,441
Gain (loss) on available for sale securities, net	Gain (loss) on available for sale securities, net	1,430		467		4,339		(12)		5,580		Gain (loss) on available for sale securities, net	1,255		1,430		467		4,339		(12)

Total other operating revenue	Total other operating revenue	191,446		177,054		198,789		229,938		233,272		Total other operating revenue	229,832		191,446		177,054		198,789		229,938
Other operating expense	Other operating expense											Other operating expense
Personnel	Personnel	172,035		173,010		176,198		179,860		176,235		Personnel	175,863		172,035		173,010		176,198		179,860
Business promotion	Business promotion	2,744		2,154		3,728		2,633		1,935		Business promotion	4,939		2,744		2,154		3,728		2,633
Charitable contributions to BOKF Foundation	Charitable contributions to BOKF Foundation	—		4,000		6,000		—		3,000		Charitable contributions to BOKF Foundation	—		—		4,000		6,000		—
Professional fees and services	Professional fees and services	12,361		11,980		14,254		14,074		12,161		Professional fees and services	12,436		12,361		11,980		14,254		14,074
Net occupancy and equipment	Net occupancy and equipment	26,633		26,662		27,875		28,111		30,675		Net occupancy and equipment	28,395		26,633		26,662		27,875		28,111
Insurance	Insurance	3,660		4,620		4,006		5,848		5,156		Insurance	3,712		3,660		4,620		4,006		5,848
Data processing and communications	Data processing and communications	36,418		37,467		35,061		34,751		32,942		Data processing and communications	38,371		36,418		37,467		35,061		34,751
Printing, postage and supplies	Printing, postage and supplies	4,285		3,440		3,805		3,482		3,502		Printing, postage and supplies	3,558		4,285		3,440		3,805		3,482
Amortization of intangible assets	Amortization of intangible assets	4,578		4,807		5,088		5,071		5,190		Amortization of intangible assets	4,488		4,578		4,807		5,088		5,071
Mortgage banking costs	Mortgage banking costs	11,126		13,943		14,765		15,803		15,598		Mortgage banking costs	8,962		11,126		13,943		14,765		15,803
Other expense	Other expense	17,312		13,701		11,892		7,411		9,572		Other expense	10,553		17,312		13,701		11,892		7,411
Total other operating expense	Total other operating expense	291,152		295,784		302,672		297,044		295,966		Total other operating expense	291,277		291,152		295,784		302,672		297,044
Net income before taxes	Net income before taxes	215,603		186,690		199,847		204,644		80,089		Net income before taxes	241,782		215,603		186,690		199,847		204,644
Federal and state income taxes	Federal and state income taxes	48,496		42,382		45,138		50,552		15,803		Federal and state income taxes	54,061		48,496		42,382		45,138		50,552
Net income	Net income	167,107		144,308		154,709		154,092		64,286		Net income	187,721		167,107		144,308		154,709		154,092
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	686		(1,752)		485		58		(407)		Net income (loss) attributable to non-controlling interests	(601)		686		(1,752)		485		58
Net income attributable to BOK Financial Corporation shareholders	Net income attributable to BOK Financial Corporation shareholders	$	166,421	$	146,060	$	154,224	$	154,034	$	64,693	Net income attributable to BOK Financial Corporation shareholders	$	188,322	$	166,421	$	146,060	$	154,224	$	154,034

Earnings per share:	Earnings per share:											Earnings per share:
Basic	Basic	$2.40		$2.10		$2.21		$2.19		$0.92		Basic	$2.74		$2.40		$2.10		$2.21		$2.19
Diluted	Diluted	$2.40		$2.10		$2.21		$2.19		$0.92		Diluted	$2.74		$2.40		$2.10		$2.21		$2.19
Average shares used in computation:	Average shares used in computation:											Average shares used in computation:
Basic	Basic	68,815,666		69,137,375		69,489,597		69,877,866		69,876,043		Basic	68,359,125		68,815,666		69,137,375		69,489,597		69,877,866
Diluted	Diluted	68,817,442		69,141,710		69,493,050		69,879,290		69,877,467		Diluted	68,360,871		68,817,442		69,141,710		69,493,050		69,879,290

- ~~101~~100 -

PART II. Other Information

Item 1. Legal Proceedings

See discussion of legal proceedings at Note 6 to the Consolidated Financial Statements.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended ~~June~~September 30, 2021.

Period
Total Number of Shares Purchased2
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1
Maximum Number of Shares that May Yet Be Purchased Under the Plans
April 1 to April 30, 2021 170,000 $ 88.70 170,000 2,596,187
May 1 to May 31, 2021 227,994 $ 88.82 227,994 2,368,193
June 1 to June 30, 2021 95,000 $ 89.14 95,000 2,273,193
Total 492,994 492,994


Period	Total Number of Shares Purchased2	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1	Maximum Number of Shares that May Yet Be Purchased Under the Plans
July 1 to July 31, 2021	125,000	$	83.45	125,000	2,148,193
August 1 to August 31, 2021	195,141	$	86.13	195,141	1,953,052
September 1 to September 30, 2021	158,000	$	84.84	158,000	1,795,052
Total	478,141			478,141

1On April 30, 2019, the Company's board of directors authorized the Company to repurchase up to five million shares of the Company's common stock. As of ~~June~~September 30, 2021, the Company had repurchased ~~2,726,807~~3,204,948 shares under this plan. Future repurchases of the Company's common stock will vary based on market conditions, regulatory limitations and other factors.

2The Company may repurchase mature shares from employees to cover the exercise price and taxes in connection with employee equity compensation.

Item 6. Exhibits

31.1Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Changes in Equity, (iv) the Consolidated Statement of Cash Flows and (v) the Notes to Consolidated Financial Statements. The XBRL instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104 Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

Items 3, 4 and 5 are not applicable and have been omitted.

- ~~102~~101 -

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BOK FINANCIAL CORPORATION

(Registrant)

Date: ~~August 4,~~November 3, 2021


/s/ Steven E. Nell
Steven E. Nell
Executive Vice President and
Chief Financial Officer


/s/ John C. Morrow
John C. Morrow
Senior Vice President and
Chief Accounting Officer

- ~~103~~102 -


	200 bp Increase						100 bp Decrease1
	June 30,						June 30,
	2021			2020			2021	2020
Anticipated impact over the next twelve months on net interest revenue	$	57,142		$	35,746		N/A	N/A
	5.15		%	3.47		%	N/A	N/A