0000875357us-gaap:~~FairValueInputsLevel2Memberbokf:LoanstoindividualsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-31~~OperatingSegmentsMemberbokf:PersonaltrustrevenueMemberbokf:WealthManagementMember2021-01-012021-06-30

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 ~~March 31,~~June 30, 2022


☐						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. 001-37811

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 every Interactive Data File required to be submitted 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, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨

Non-accelerated filer ¨ 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: ~~68,104,043~~67,806,005 shares of common stock ($.00006 par value) as of ~~March 31,~~June 30, 2022.

BOK Financial Corporation

Form 10-Q

Quarter Ended ~~March 31,~~June 30, 2022

Index


Part I. Financial Information
Management’s Discussion and Analysis (Item 2)			1
Market Risk (Item 3)			3840
Controls and Procedures (Item 4)			4244
Consolidated Financial Statements – Unaudited (Item 1)			4346

Quarterly Financial Summary – Unaudited (Item 2)			91101
Quarterly Earnings Trend – Unaudited			93103

Part II. Other Information
Item 1. Legal Proceedings			94104

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			94104
Item 6. Exhibits			94104
Signatures			95105

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

Performance Summary

BOK Financial Corporation (“the Company”) reported net income of $132.8 million or $1.96 per diluted share for the second quarter of 2022 compared to $62.5 million or $0.91 per diluted share for the first quarter of 2022. ~~Net~~Increased fee income led by revenue growth from trading activities combined with higher net interest revenue and decreased operating expenses to grow net income in the second quarter. First quarter trading revenue was ~~$117.3 million or $1.71 per diluted share for the fourth quarter of 2021 and $146.1 million or $2.10 per diluted share for the first quarter of 2021. Interest~~negatively affected by interest rate volatility ~~driven by expectations of future Federal Reserve actions to address~~and concern over rising ~~inflation as well as the the deepening conflict in Ukraine combined to significantly decrease our trading revenue, mortgage loan production volumes, and our net mortgage servicing rights valuation.~~inflation.

Pre-provision net revenue ("PPNR"), a non-GAAP measure, was $169.0 million for the second quarter of 2022 compared to $78.7 million for the first quarter of ~~2022, $135.2 million for the fourth quarter of 2021, and $163.4 million for the first quarter of 2021.~~2022.

Highlights of the ~~first~~second quarter of 2022 included:

•Net interest revenue totaled ~~$268.4~~$274.0 million, ~~a decrease~~an increase of ~~$8.7 million compared to the fourth quarter of 2021 and $12.0~~$5.6 million compared to the first quarter of ~~2021.~~2022. Average earning assets were ~~$43.5~~$39.1 billion, ~~for the first quarter~~a decrease of ~~2022, $44.2~~$4.4 billion, ~~for the fourth quarter of 2021, and $44.2 billion for the first quarter of 2021.~~largely due to a reduction in our trading inventory. Net interest margin was 2.76 percent for the second quarter of 2022 compared to 2.44 percent for the ~~first quarter of 2022, 2.52 percent for the fourth quarter of 2021, and 2.62 percent for the first quarter of 2021.~~prior quarter.

•Fees and commissions revenue totaled ~~$97.6~~$173.4 million, ~~a decrease~~an increase of ~~$48.7 million compared to the fourth quarter of 2021 and $64.5 million compared to the first quarter of 2021.~~$75.7 million. Brokerage and trading revenue ~~decreased $41.9~~increased $71.1 million ~~from~~following trading losses in the prior ~~quarter and $47.9~~quarter. Revenue growth in all other fee-generating business activities was partially offset by a $5.3 million ~~from the first quarter of 2021. Mortgage~~decrease in mortgage banking ~~revenue also decreased $4.6 million from the previous quarter and $20.5 million compared to first quarter of 2021.~~revenue.

•The net ~~cost~~benefit of the changes in fair value of mortgage servicing rights and related economic hedges was $1.9 million for the second quarter of 2022 compared to a net cost of $8.4 million for the first quarter of 2022 ~~compared~~due to ~~a net benefit of $4.7 million for~~reduced price sensitivity in the ~~fourth quarter of 2021 and a net benefit of $4.7 million for the first quarter of 2021.~~second quarter.

•Other operating expense totaled ~~$277.6~~$273.7 million, a decrease of ~~$21.9 million compared to the previous quarter and a decrease of $18.2 million compared to the first quarter of 2021. Compared to the fourth quarter of 2021, personnel~~$4.0 million. Personnel expense decreased ~~$15.2~~$4.3 million, largely due to ~~a decrease in incentive~~lower share-based compensation expense. Non-personnel expense ~~decreased $6.6 million as~~was relatively consistent with the fourth quarter of 2021 included a $5.0 million charitable donation to the BOKF Foundation that did not recur in the first quarter of 2022. Compared to the first quarter of 2021, personnel expense decreased $13.8 million due to lower incentive compensation costs. Non-personnel expenses decreased $4.4 million as lower mortgage banking costs, other expense and donations to the BOKF Foundation were partially offset by increased business promotion expenses, occupancy and equipment expenses, and data processing and communications expenses.prior quarter.

•Period-end outstanding loan balances totaled ~~$20.7~~$21.3 billion at June 30, 2022, growing $617 million compared to March 31, 2022, ~~growing $469 million compared~~largely due to ~~December 31, 2021.~~growth in commercial loans. Excluding a decrease in loans originated through the Small Business Administration's Paycheck Protection Program ("PPP"), outstanding loan balances increased ~~$608~~$711 million. ~~Commercial loans increased $377~~Unfunded loan commitments also grew by $979 million ~~and commercial real estate loans increased $270 million.~~during the second quarter. Average loan balances increased ~~$221~~$594 million compared to the prior quarter to ~~$20.5~~$21.1 billion.

•No provision for expected credit losses was necessary for the ~~first~~second quarter of ~~2022. A $17.0 million negative provision for expected credit losses was recorded in~~2022, consistent with the prior quarter. ~~The impact of continued strength~~An increase in ~~commodity prices and improved credit quality metrics was offset by higher~~ required provision due to loan growth and changes in our economic ~~outlook.~~outlook was offset by a sustained trend of improving credit quality metrics. The combined allowance for credit losses totaled $283 million or 1.33 percent of outstanding loans, excluding PPP loans, at June 30, 2022. The combined allowance for credit losses was $283 million or 1.38 percent of outstanding loans, excluding PPP loans, at March 31, 2022. ~~The combined allowance for credit losses was $289 million or 1.45 percent of outstanding loans, excluding PPP loans, at December 31, 2021.~~

•Nonperforming assets not guaranteed by U.S. government agencies decreased $13 million compared to ~~December~~March 31, ~~2021.~~2022. Potential problem loans decreased ~~$53~~$39 million while other loans especially mentioned decreased ~~$4.1~~$18 million. Net recoveries were $799 thousand or 0.02 percent of average loans on an annualized basis for the second quarter of 2022, excluding PPP loans. Net charge-offs were 0.06 percent of average loans, excluding PPP loans, over the last four quarters. Net charge-offs were $6.0 million or 0.12 percent of average loans on an annualized basis for the first quarter of 2022, excluding PPP loans. Net charge-offs were 0.14 percent of average loans, excluding PPP loans, over the last four quarters. Net recoveries were $714 thousand or 0.01 percent of average loans on an annualized basis for the fourth quarter of 2021, excluding PPP loans.

~~- 1 -~~

•Period-end deposits were ~~$39.4~~$38.6 billion at June 30, 2022, an $807 million decrease compared to March 31, 2022 aas customers begin to redeploy cash resources to higher yielding alternatives and resume spending following the height of the pandemic. Average deposits decreased $1.8 billion, ~~decrease compared to December 31, 2021 due to expected seasonal activity from 2021 year-end balances. Average deposits increased $560 million,~~ including a ~~$243 million increase in demand deposits and a $317 million increase~~$1.9 billion decrease in interest bearing deposits.

•The common equity Tier 1 capital ratio at ~~March 31,~~June 30, 2022 was ~~11.30~~11.61 percent. Other regulatory capital ratios included the Tier 1 capital ratio at ~~11.31~~11.63 percent, total capital ratio at ~~12.25~~12.59 percent, and leverage ratio at ~~8.47~~9.12 percent. At ~~December~~March 31, ~~2021,~~2022, the common equity Tier 1 capital ratio was ~~12.24~~11.30 percent, the Tier 1 capital ratio was ~~12.25~~11.31 percent, total capital ratio was ~~13.29~~12.25 percent, and leverage ratio was ~~8.55~~8.47 percent.

- 1 -

•The Company repurchased ~~475,877~~294,084 shares of common stock at an average price of ~~$101.02~~$82.98 per share in the ~~first~~second quarter of 2022 and ~~128,522~~475,877 shares at an average price of ~~$104.46~~$101.02 in the ~~fourth~~first quarter of ~~2021.~~2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

•The Company paid a regular cash dividend of ~~$36.1~~$35.9 million or $0.53 per common share during the ~~first~~second quarter of 2022. On ~~May 3,~~August 2, 2022, the board of directors approved a quarterly cash dividend of $0.53 per common share payable on or about ~~May~~August 25, 2022 to shareholders of record as of ~~May 10,~~August 16, 2022.

Highlights of the six months ended June 30, 2022 included:

•Tax-equivalent net interest revenue totaled $546.4 million for the six months ended June 30, 2022 and $565.4 million for the six months ended June 30, 2021. Net interest revenue decreased $16.3 million from changes in earning assets and $2.6 million from changes in interest rates. Net interest margin was 2.60 percent compared to 2.61 percent. Average earning assets decreased $2.8 billion to $41.3 billion, primarily due to lower loan balances and a reduction in trading securities. In response to rising inflation, the Federal Reserve increased the federal funds rate 150 basis points since the beginning of 2022, which led to an 18 basis point increase in loan yields while funding costs only increased 4 basis points. PPP loan fees totaled $6.5 million for the six months ended June 30, 2022 and $22.3 million for the six months ended June 30, 2021. PPP loan fees remaining to be recognized totaled $1.1 million as of June 30, 2022. The yield on trading securities decreased 19 basis points due to a lower weighted average coupon rate.

•Fees and commissions revenue totaled $271.0 million for the six months ended June 30, 2022, a $60.6 million decrease compared to the six months ended June 30, 2021, largely due to a reduction in brokerage and trading revenue and mortgage banking revenue. A $58.8 million decrease in trading revenue due to disruption in the fixed income markets related to economic uncertainty was partially offset by a $19.7 million increase in customer hedging revenue. Mortgage banking revenue decreased $30.3 million as rapidly rising mortgage interest rates and continued inventory shortages have adversely affected both loan production volume and margins. Other revenue decreased $16.3 million as a result of lower operating revenue from repossessed oil and gas assets due to the sale of properties in the third quarter of 2021.

•Other gains and losses, net decreased $35.9 million. The prior year included gains on alternative investments and sales of repossessed assets while the current year included the write-down of a repossessed equity interest in a midstream entity.

•Total operating expense was $551.3 million for the six months ended June 30, 2022, a decrease of $35.7 million compared to the six months ended June 30, 2021. Personnel expense decreased $30.9 million, primarily due to lower incentive compensation costs related to reduced cash-based incentives resulting from lower loan and trading volume and deferred compensation expense, which is largely offset by a decrease in the value of related rabbi trust investments. Non-personnel expense decreased $4.8 million to $237.1 million. Lower mortgage banking costs and repossessed asset operating expenses were largely offset by increased business promotion, occupancy and equipment, and data processing costs.

•No provision for credit losses was necessary for the six months ended June 30, 2022. An increase in allowance related to our lending activities from strong loan growth and changes in our reasonable and supportable forecast were offset by the impact from improving credit metrics.A $60.0 million negative provision for credit losses was recorded for the six months ended June 30, 2021 due to forecasts for improving macroeconomic factors, including stabilizing energy prices, and improving credit quality metrics.

- 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 $276.1 million for the second quarter of 2022 and $270.4 million for the first quarter of ~~2022, $279.2 million for the fourth quarter of 2021, and $282.7 million for~~2022. Compared to the first quarter of ~~2021. Compared to the fourth quarter of 2021,~~2022, net interest revenue increased ~~$3.8~~$18.3 million from changes in ~~earning assets~~interest rates and decreased $12.6 million from changes in ~~interest rates.~~earning assets. 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.

Average earning assets decreased ~~$744 million~~$4.4 billion compared to the ~~fourth~~first quarter of ~~2021.~~2022. Average trading securities were reduced by ~~$723 million.~~$4.4 billion as we reduced our inventory of low-coupon residential mortgage-backed securities and repositioned the trading portfolio in response to rising mortgage interest rates. Average loan balances increased ~~$221~~$594 million, largely due to growth in commercial loans, partially offset by a reduction of PPP loans. The average balance of available for sale securities, which consists largely of residential and commercial mortgage-backed securities guaranteed by U.S. government agencies, decreased ~~$155~~$834 million while investment securities increased $416 million. Late in the second quarter of 2022, we transferred $2.4 billion of U.S. government agency mortgage-backed securities from available for sale to investment securities to limit the effect of future rate increases on the tangible common equity ratio. We purchase securities to supplement earnings and to manage interest rate risk. Interest-bearing cash and cash equivalents decreased ~~$158~~$207 million.

Total average deposits ~~grew~~were reduced by ~~$560 million over~~$1.8 billion compared to the ~~fourth~~first quarter of ~~2021.~~2022 as customers begin to deploy cash resources into higher yielding alternatives and resume normal spending levels following the height of the pandemic. Funds purchased and repurchase agreements decreased ~~$889~~$780 million while other borrowings increased ~~$268~~$153 million.

Net interest margin was ~~2.44~~2.76 percent compared to ~~2.52~~2.44 percent in the ~~fourth~~first quarter of ~~2021.~~2022. The tax-equivalent yield on earning assets was ~~2.58~~2.96 percent, ~~a decrease~~an increase of 838 basis points. Loan yields increased 35 basis points to 3.92 percent. The yield on trading securities was ~~down 18~~up 29 basis points to ~~1.71 percent, largely due to a decrease in the weighted average coupon rate. Loan yields decreased 13 basis points to 3.57~~2.00 percent. Yields related to loan fees decreased 17 basis points from the prior quarter while core loan yields increased 4 basis points. PPP loan fees of $3.9 million were recognized in the first quarter of 2022 compared to $7.7 million in the previous quarter. PPP loan fees remaining to be recognized were $3.5 million as of March 31, 2022. The available for sale securities portfolio yield increased 57 basis points to ~~1.77~~1.84 percent. The yield on fair value option securities increased 1011 basis points to ~~2.81~~2.92 percent. The yield on investment securities decreased 272 basis points due to the transfer of securities from the available for sale portfolio to the investment portfolio. The yield on interest-bearing cash and cash equivalents increased 65 basis points.

Funding costs were ~~0.21~~0.31 percent, ~~consistent with the prior quarter.~~a 10 basis point increase. The cost of interest bearing deposits ~~was unchanged at 0.12~~increased 12 basis points to 0.24 percent. The cost of ~~other borrowed~~ funds ~~increased 7~~purchased and repurchase agreements decreased 42 basis points to ~~0.74~~0.53 percent while the cost of other borrowings increased 63 basis points to 1.01 percent. The benefit to net interest margin from assets funded by non-interest liabilities was 711 basis points, ~~for the first quarter~~an increase of ~~2022, unchanged from the prior quarter.~~

Compared to the first quarter of 2021, tax-equivalent net interest revenue decreased $2.1 million from a reduction in average earning assets and $10.2 million from changes in interest rates. Net interest margin was 2.44 percent for the first quarter of 2022, compared to 2.62 percent for the first quarter of 2021.

Average earning assets decreased $717 million compared to the first quarter of 2021. Average loans decreased $2.3 billion, largely due to a reduction in PPP loans combined with purposeful deleveraging by our customers as borrowers continued to pay down during this time of economic uncertainty. Available for sale securities decreased $341 million. Average trading securities increased $1.6 billion due to increased customer demand for U.S. government agency mortgage-backed securities in 2021.

Total average deposits increased $3.8 billion compared to the first quarter of 2021 as customers retained higher balances due to economic uncertainty during the height of the pandemic. Other borrowings decreased $2.2 billion while funds purchased and repurchase agreements decreased $826 million.

~~The tax-equivalent yield on earning assets decreased 20~~4 basis points compared to the first quarter of 2021. The yield on trading securities decreased 35 basis points due to a lower weighted average coupon rate. The available for sale securities portfolio yield decreased 7 basis points as principal cash flows received from maturities of the available for sale securities portfolio were reinvested at lower current market rates. Loan yields increased 2 basis points to 3.57 percent. The yield on fair value option securities was up 86 basis points.

~~- 3 -~~

Funding costs decreased 3 basis points compared to the first quarter of 2021. The cost of other borrowed funds increased 44 basis points and the cost of interest-bearing deposits decreased 5 basis points. The benefit to net interest margin from earning assets funded by non-interest bearing liabilities was 7 basis points for the first quarter of 2022, a decrease of 1 basis point compared to the first quarter of 2021.

Our overall objective is to manage the Company’s balance sheet for changes in interest rates as is further described in the Market Risk section of this report. Approximately 7778 percent 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.

- 3 -

Table 1 -- Volume/Rate Analysis

(In thousands)


		Three Months Ended Mar. 31, 2022 / Dec. 31, 2021						Three Months Ended June 30, 2022 / Mar. 31, 2022				Six Months Ended June 30, 2022 / 2021
				Change Due To1						Change Due To1						Change Due To1
		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	$	(10)	$	(66)	$	56		Interest-bearing cash and cash equivalents	$	1,264	$	(266)	$	1,530	$	1,878	$	375	$	1,503
Trading securities	Trading securities	(3,496)		758		(4,254)			Trading securities	(18,032)		(23,186)		5,154		(8,621)		(1,687)		(6,934)
Investment securities	Investment securities	(186)		(205)		19			Investment securities	1,110		3,943		(2,833)		396		3,528		(3,132)
Available for sale securities	Available for sale securities	2,380		827		1,553			Available for sale securities	864		(1,320)		2,184		(769)		1,753		(2,522)
Fair value option securities	Fair value option securities	189		173		16			Fair value option securities	(54)		(71)		17		30		(210)		240
Restricted equity securities	Restricted equity securities	79		195		(116)			Restricted equity securities	277		13		264		(619)		(504)		(115)
Residential mortgage loans held for sale	Residential mortgage loans held for sale	152		130		22			Residential mortgage loans held for sale	165		(287)		452		4		(742)		746
Loans	Loans	(8,474)		16		(8,490)			Loans	25,621		6,526		19,095		(9,693)		(30,931)		21,238
Total tax-equivalent interest revenue	Total tax-equivalent interest revenue	(9,366)		1,828		(11,194)			Total tax-equivalent interest revenue	11,215		(14,648)		25,863		(17,394)		(28,418)		11,024
Interest expense:	Interest expense:								Interest expense:
Transaction deposits	Transaction deposits	246		(104)		350			Transaction deposits	6,111		(565)		6,676		4,935		457		4,478
Savings deposits	Savings deposits	(23)		2		(25)			Savings deposits	3		3		—		(33)		17		(50)
Time deposits	Time deposits	(169)		(253)		84			Time deposits	150		(313)		463		(1,717)		(1,476)		(241)
Funds purchased and repurchase agreements	Funds purchased and repurchase agreements	(594)		(1,882)		1,288			Funds purchased and repurchase agreements	(3,090)		(1,420)		(1,670)		4,236		(1,682)		5,918
Other borrowings	Other borrowings	(1)		281		(282)			Other borrowings	2,196		269		1,927		(1,982)		(6,117)		4,135
Subordinated debentures	Subordinated debentures	(28)		(14)		(14)			Subordinated debentures	171		7		164		(3,925)		(3,287)		(638)
Total interest expense	Total interest expense	(569)		(1,970)		1,401			Total interest expense	5,541		(2,019)		7,560		1,514		(12,088)		13,602
Tax-equivalent net interest revenue	Tax-equivalent net interest revenue	(8,797)		3,798		(12,595)			Tax-equivalent net interest revenue	5,674		(12,629)		18,303		(18,908)		(16,330)		(2,578)
Change in tax-equivalent adjustment	Change in tax-equivalent adjustment	(131)							Change in tax-equivalent adjustment	67						(608)
Net interest revenue	Net interest revenue	$	(8,666)						Net interest revenue	$	5,607					$	(18,300)

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

~~- 4 -~~

~~Table 1 -- Volume/Rate Analysis (continued)~~

~~(In thousands)~~
Three Months Ended
Mar. 31, 2022 / 2021

Change Due To1
Change Volume Yield/Rate
Tax-equivalent interest revenue:
Interest-bearing cash and cash equivalents $ 299 $ 121 $ 178
Trading securities 5,072 12,244 (7,172)
Investment securities (418) (498) 80
Available for sale securities (662) 1,625 (2,287)
Fair value option securities (5) (187) 182
Restricted equity securities (252) (173) (79)
Residential mortgage loans held for sale 14 (175) 189
Loans (19,516) (20,356) 840
Total tax-equivalent interest revenue (15,468) (7,399) (8,069)
Interest expense:
Transaction deposits (980) 235 (1,215)
Savings deposits (13) 11 (24)
Time deposits (1,259) (630) (629)
Funds purchased and repurchase agreements 3,350 (1,170) 4,520
Other borrowings (2,184) (2,129) (55)
Subordinated debentures (2,045) (1,594) (451)
Total interest expense (3,131) (5,277) 2,146
Tax-equivalent net interest revenue (12,337) (2,122) (10,215)
Change in tax-equivalent adjustment (328)
Net interest revenue $ (12,009)

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

~~- 5 -~~

~~Other Operating Revenue~~

Other operating revenue was $87.9 million for the first quarter of 2022, $157.4 million for the fourth quarter of 2021, and $177.1 million for the first quarter of 2021. Recent national and international events, including rising inflation, recent actions by the Federal Reserve to increase interest rates and expectations of future increases, and the deepening conflict in Ukraine combined to significantly decrease trading revenue and mortgage loan production volumes.

~~Table 2 – Other Operating Revenue~~

~~(In thousands)~~

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Brokerage and trading revenue $ (27,079) $ 14,869 $ (41,948) (282) % $ 20,782 $ (47,861) (230) %
Transaction card revenue 24,216 24,998 (782) (3) % 22,430 1,786 8 %
Fiduciary and asset management revenue 46,399 46,872 (473) (1) % 41,322 5,077 12 %
Deposit service charges and fees 27,004 26,718 286 1 % 24,209 2,795 12 %
Mortgage banking revenue 16,650 21,278 (4,628) (22) % 37,113 (20,463) (55) %
Other revenue 10,445 11,586 (1,141) (10) % 16,296 (5,851) (36) %
Total fees and commissions revenue 97,635 146,321 (48,686) (33) % 162,152 (64,517) (40) %
Other gains (losses), net (1,644) 6,081 (7,725) N/A 10,121 (11,765) N/A
Loss on derivatives, net (46,981) (4,788) (42,193) N/A (27,650) (19,331) N/A
Gain (loss) on fair value option securities, net (11,201) 1,418 (12,619) N/A (1,910) (9,291) N/A
Change in fair value of mortgage servicing rights 49,110 7,859 41,251 N/A 33,874 15,236 N/A
Gain on available for sale securities, net 937 552 385 N/A 467 470 N/A
Total other operating revenue $ 87,856 $ 157,443 $ (69,587) (44) % $ 177,054 $ (89,198) (50) %

- 4 -

Other Operating Revenue

Other operating revenue was $168.6 million for the second quarter of 2022 and $87.9 million for the first quarter of 2022. Brokerage and trading revenue, which was negatively impacted in the prior quarter by market volatility due to uncertainty surrounding rising inflation and interest rates, grew significantly in the current quarter.

Table 2 – Other Operating Revenue

(In thousands)


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Brokerage and trading revenue	$	44,043	$	(27,079)	$	71,122	263	%			$	16,964	$	50,190	$	(33,226)	(66)	%
Transaction card revenue	26,940		24,216		2,724		11	%			51,156		47,353		3,803		8	%
Fiduciary and asset management revenue	49,838		46,399		3,439		7	%			96,237		86,154		10,083		12	%
Deposit service charges and fees	28,500		27,004		1,496		6	%			55,504		50,070		5,434		11	%
Mortgage banking revenue	11,368		16,650		(5,282)		(32)	%			28,018		58,332		(30,314)		(52)	%
Other revenue	12,684		10,445		2,239		21	%			23,129		39,468		(16,339)		(41)	%
Total fees and commissions revenue	173,373		97,635		75,738		78	%			271,008		331,567		(60,559)		(18)	%
Other gains (losses), net	(7,639)		(1,644)		(5,995)		N/A				(9,283)		26,570		(35,853)		N/A
Loss on derivatives, net	(13,569)		(46,981)		33,412		N/A				(60,550)		(8,830)		(51,720)		N/A
Gain (loss) on fair value option securities, net	(2,221)		(11,201)		8,980		N/A				(13,422)		(3,537)		(9,885)		N/A
Change in fair value of mortgage servicing rights	17,485		49,110		(31,625)		N/A				66,595		20,833		45,762		N/A
Gain on available for sale securities, net	1,188		937		251		N/A				2,125		1,897		228		N/A



Total other operating revenue	$	168,617	$	87,856	$	80,761	92	%			$	256,473	$	368,500	$	(112,027)	(30)	%

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 2739 percent of total revenue for the ~~first~~second quarter of 2022, 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. Interest rate volatility during the first quarter had a significant negative impact to our mortgage-related fee businesses, reducing the ratio of fees and commissions from our historical range of 35 percent to 45 percent. 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. Many of the economic factors such as rising interest rates that we expect will result in growth in net interest revenue or fiduciary and asset management revenue may also decrease mortgage banking production volumes and related ~~trading, as we experienced in the first quarter of 2022.~~trading. The velocity of changes in market conditions and interest rates may result in timing differences between when offsetting impacts and benefits are realized. As interest rates are expected to move higher, we expect to experience increased benefits to our net interest margin, which provides an offset to reduced mortgage-related fee income. Generally, for operating revenues not as directly related to movement in interest rates, we expect growth 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 $41.9~~increased $71.1 million or ~~282 percent compared to the fourth quarter of 2021 and $47.9 million or 230~~263 percent compared to the first quarter of ~~2021.~~2022.

- 65 -

Trading revenue includes net realized and unrealized gains and losses primarily related to 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 ~~decreased $40.9 million to a net loss of $54.0~~increased $66.0 million compared to the prior ~~quarter~~quarter..Disruption in the fixed income markets related to uncertainty around rising inflation and ~~decreased $57.8 million compared to~~interest rates adversely affected the value of trading securities during the first quarter of ~~2021.~~2022. During ~~2021, to meet customer demand in response to expected tightening by~~ the ~~Federal Reserve and increasing rates,~~second quarter, we ~~increased the trading volume~~fully sold our inventory of ~~short duration, low coupon~~low-coupon, U.S. government agency residential mortgage-backed securities, which led to record trading revenues in the third quarter of 2021. As inflation pressure increased in the first quarter of 2022 and the conflict in Ukraine intensified, fixed income markets were disrupted, reducing the demand for these securities. ~~As of March 31, 2022, we have reduced our exposure to these securities by approximately 70 percent compared to December 31, 2021.~~

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 ~~$10.9~~$13.1 million for the ~~first~~second quarter of 2022, ~~an increase of $1.8~~up $2.2 million over the prior quarter. ~~Customer hedging revenue increased $8.3 million over the first quarter of 2021 due to growth in interest rate and energy contracts.~~ 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 $4.6 million for the first quarter of 2022, relatively unchanged compared to both the fourth quarter of 2021 and first quarter of 2021.~~

Investment banking, which includes fees earned upon completion of underwriting, financial advisory services and loan syndication fees, totaled ~~$7.7~~$11.8 million for the second quarter of 2022, an increase of $4.2 million compared to the first quarter of 2022, ~~a decrease of $3.9 million compared to the fourth quarter of 2021,~~ related to the timing and volume of completed loan syndication transactions. ~~Investment banking revenue increased $866 thousand over the first quarter of 2021.~~

Transaction Card Revenue

Transaction card revenue totaled ~~$24.2~~$26.9 million for the second quarter of 2022, an increase of $2.7 million compared to the first quarter of ~~2022, down slightly compared~~2022. Transaction volume is rising as customers return to more normal spending levels following the ~~fourth quarter~~height of ~~2021 due to seasonal factors. Transaction card revenue increased $1.8 million or 8 percent over~~ the ~~first quarter of 2021,~~pandemic. , largely due to stimulus measures and the broader reopening of the U.S. economy.

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 ~~was relatively unchanged compared to the fourth quarter of 2021 and~~ increased ~~$5.1~~$3.4 million ~~or 12 percent compared to~~over the first quarter of ~~2021, largely driven by~~2022. Money market fund revenue share grew $3.0 million. The second quarter also included an increase in ~~trust~~seasonal tax preparation fees of $1.8 million and ~~managed account fees from higher client asset balances. We had approximately $2.6 million in~~reduction of fee waivers ~~during the first quarter~~ of ~~2022, compared to approximately $3.0 million in fee waivers in the prior quarter and $2.8 million in the first quarter of 2021.~~$2.1 million. We ~~have~~ voluntarily waived certain administration fees on the Cavanal Hill money market funds in order to maintain positive yields on these funds induring the ~~current~~ short-term interest rate environment. As of June 30, 2022, we are no longer waiving those fees. These increases were partially offset by a $3.2 million reduction in trust business line fees related to decreased asset under management billable fees, consistent with market driven declines in equities, which account for a third of the assets under management or administration.

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

- 76 -

Table 3 -- Assets Under Management or Administration

(In thousands)


		Three Months Ended																			Three Months Ended
		March 31, 2022						December 31, 2021						March 31, 2021							June 30, 2022						March 31, 2022
		Balance1		Revenue2		Margin3		Balance1		Revenue2		Margin3		Balance1		Revenue2		Margin3			Balance1		Revenue2		Margin3		Balance1		Revenue2		Margin3
Managed fiduciary assets:	Managed fiduciary assets:																			Managed fiduciary assets:
Personal	Personal	$	11,292,472	$	28,331	1.00	%	$	12,739,289	$	29,633	0.93	%	$	11,369,467	$	23,608	0.83	%	Personal	$	10,403,398	$	27,389	1.05	%	$	11,292,472	$	28,331	1.00	%
Institutional	Institutional	18,592,153		9,995		0.22	%	17,477,280		7,536		0.17	%	15,144,797		6,818		0.18	%	Institutional	16,895,773		7,213		0.17	%	18,592,153		9,995		0.22	%
Total managed fiduciary assets	Total managed fiduciary assets	29,884,625		38,326		0.51	%	30,216,569		37,169		0.49	%	26,514,264		30,426		0.46	%	Total managed fiduciary assets	27,299,171		34,602		0.51	%	29,884,625		38,326		0.51	%

Non-managed assets:	Non-managed assets:																			Non-managed assets:
Fiduciary	Fiduciary	31,210,695		5,107		0.07	%	34,320,264		6,647		0.08	%	29,713,004		9,286		0.13	%	Fiduciary	28,673,413		12,684		0.18	%	31,210,695		5,107		0.07	%
Non-fiduciary	Non-fiduciary	19,361,212		2,966		0.06	%	20,253,072		3,056		0.06	%	18,421,279		1,610		0.03	%	Non-fiduciary	18,582,670		2,552		0.05	%	19,361,212		2,966		0.06	%
Safekeeping and brokerage assets under administration	Safekeeping and brokerage assets under administration	20,624,823		—		—	%	20,127,816		—		—	%	17,307,641		—		—	%	Safekeeping and brokerage assets under administration	21,426,035		—		—	%	20,624,823		—		—	%
Total non-managed assets	Total non-managed assets	71,196,730		8,073		0.05	%	74,701,152		9,703		0.05	%	65,441,924		10,896		0.07	%	Total non-managed assets	68,682,118		15,236		0.09	%	71,196,730		8,073		0.05	%

Total assets under management or administration	Total assets under management or administration	$	101,081,355	$	46,399	0.18	%	$	104,917,721	$	46,872	0.18	%	$	91,956,188	$	41,322	0.18	%	Total assets under management or administration	$	95,981,289	$	49,838	0.21	%	$	101,081,355	$	46,399	0.18	%


	Six Months Ended
	June 30, 2022						June 30, 2021
	Balance1		Revenue2		Margin3		Balance1		Revenue2		Margin3
Managed fiduciary assets:
Personal	$	10,403,398	$	55,720	1.07	%	$	11,973,758	$	52,242	0.87	%
Institutional	16,895,773		17,208		0.20	%	16,339,627		14,075		0.17	%
Total managed fiduciary assets	27,299,171		72,928		0.53	%	28,313,385		66,317		0.47	%

Non-managed assets:
Fiduciary	28,673,413		17,791		0.12	%	30,341,404		15,929		0.10	%
Non-fiduciary	18,582,670		5,518		0.06	%	19,480,250		3,908		0.04	%
Safekeeping and brokerage assets under administration	21,426,035		—		—	%	18,497,709		—		—	%
Total non-managed assets	68,682,118		23,309		0.07	%	68,319,363		19,837		0.06	%

Total assets under management or administration	$	95,981,289	$	96,237	0.20	%	$	96,632,748	$	86,154	0.18	%

1 Assets under management or administration balance excludes $22 billion in assets under custody held by a sub-custodian where minimal revenue is recognized.

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

3 Annualized revenue divided by period-end balance.

A summary of changes in assets under management or administration for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 follows:

Table 4 -- Changes in Assets Under Management or Administration

(In thousands)


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021				2022		2021		2022		2021
Beginning balance	Beginning balance	$	104,917,721	$	91,592,247		Beginning balance	$	101,081,355	$	91,956,188	$	104,917,721	$	91,592,247
Net inflows (outflows)	Net inflows (outflows)	(1,774,056)		(1,328,296)			Net inflows (outflows)	(508,292)		1,191,287		(2,282,348)		(425,565)

Net change in fair value	Net change in fair value	(2,062,310)		1,692,237			Net change in fair value	(4,591,774)		3,485,273		(6,654,084)		5,466,066
Ending balance	Ending balance	$	101,081,355	$	91,956,188		Ending balance	$	95,981,289	$	96,632,748	$	95,981,289	$	96,632,748

- 7 -

Assets under management as of ~~March 31,~~June 30, 2022 consist of 4144 percent fixed income, 3834 percent equities, 1314 percent cash, and 8 percent alternative investments.

Deposit Service Charges and Fees

Deposit service charges and fees ~~were relatively flat compared to the fourth quarter of 2021 and~~ increased ~~$2.8~~$1.5 million ~~or 12 percent over the first quarter of 2021. Commercial accounts where lower earnings credit rates caused~~driven largely by ~~the low interest rate environment have resulted in higher service charges and consumer activity has increased following the pandemic shut downs.~~commercial customer activity. Overdraft and non-sufficient funds fees earned primarily on consumer deposit accounts totaled ~~$6.2~~$6.6 million for the ~~first~~second quarter of 2022, largely unchanged from the prior ~~quarter and an increase of $1.6 million over the first quarter of 2021.~~quarter.

~~- 8 -~~

Mortgage Banking Revenue

Mortgage banking revenue decreased ~~$4.6~~$5.3 million or 2232 percent compared to the ~~fourth~~first quarter of ~~2021~~2022 due to lower production volume combined with narrowing margins. ~~Interest rate volatility~~Rapidly rising interest rates and continued inventory shortages have resulted in fewer refinance opportunities and heightened competitive pricing pressure. Mortgage production volume decreased ~~$93~~$102 million to ~~$408~~$306 million. Production revenue as a percentage of production volume, which includes unrealized gains and losses on our mortgage commitment pipeline and related hedges, decreased 76140 basis points to ~~1.24 percent.~~

~~Mortgage banking revenue decreased $20.5 million or 55~~(0.16) percent, ~~compared to the first quarter~~affected by increased market competition and our securitization of 2021. Mortgage loan production volume decreased $442 million or 52 percent largely due to industry-wide housing inventory constraints and overall market conditions. Production revenue as a percentage of production volume decreased 174 basis points compared to the first quarter of 2021.loans previously repurchased from GNMA pools.

Table 5 – Mortgage Banking Revenue

(In thousands)

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Mortgage production revenue $ 5,055 $ 10,018 $ (4,963) (50) % $ 25,287 $ (20,232) (80) %
Mortgage loans funded for sale $ 418,866 $ 568,507 $ 843,053
Add: Current period end outstanding commitments 160,260 171,412 387,465
Less: Prior period end outstanding commitments 171,412 239,066 380,637
Total mortgage production volume $ 407,714 $ 500,853 $ (93,139) (19) % $ 849,881 $ (442,167) (52) %
Mortgage loan refinances to mortgage loans funded for sale 45 % 51 % (600) bps 65 % (2,000) bps
Realized margin on funded mortgage loans 1.64 % 2.34 % (70) bps 3.10 % (146) bps
Production revenue as a percentage of production volume 1.24 % 2.00 % (76) bps 2.98 % (174) bps
Primary mortgage interest rates:
Average 3.82 % 3.08 % 74 bps 2.88 % 94 bps
Period end 4.67 % 3.11 % 156 bps 3.17 % 150 bps
Mortgage servicing revenue $ 11,595 $ 11,260 $ 335 3 % $ 11,826 $ (231) (2) %
Average outstanding principal balance of mortgage loans serviced for others 16,155,329 15,930,480 224,849 1 % 15,723,231 432,098 3 %
Average mortgage servicing revenue rates 0.29 % 0.28 % 1 bp 0.31 % (2) bp


	Three Months Ended						Increase (Decrease)			% Increase (Decrease)				Six Months Ended						Increase (Decrease)			% Increase (Decrease)
	June 30, 2022			Mar. 31, 2022								June 30, 2022	June 30, 2021
Mortgage production revenue	$	(504)		$	5,055		$	(5,559)		(110)	%			$	4,551		$	35,291		$	(30,740)		(87)	%

Mortgage loans funded for sale	$	360,237		$	418,866									$	779,103		$	1,597,946
Add: Current period end outstanding commitments	106,004			160,260										106,004			276,154
Less: Prior period end outstanding commitments	160,260			171,412										171,412			380,637
Total mortgage production volume	$	305,981		$	407,714		$	(101,733)		(25)	%			$	713,695		$	1,493,463		$	(779,768)		(52)	%

Mortgage loan refinances to mortgage loans funded for sale	19		%	45		%	(2,600)		bps					32		%	83		%	(4,500)		bps
Realized margin on funded mortgage loans	0.88		%	1.64		%	(76)		bps					1.29		%	2.94		%	(165)		bps
Production revenue as a percentage of production volume	(0.16)		%	1.24		%	(140)		bps					0.64		%	2.36		%	(172)		bps
Primary mortgage interest rates:
Average	5.27		%	3.82		%	145		bps					4.54		%	2.94		%	160		bps
Period end	5.70		%	4.67		%	103		bps					5.70		%	3.02		%	268		bps

Mortgage servicing revenue	$	11,872		$	11,595		$	277		2	%			$	23,467		$	23,041		$	426		2	%
Average outstanding principal balance of mortgage loans serviced for others	17,336,596			16,155,329			1,181,267			7	%			16,745,962			15,394,202			1,351,760			9	%

Average mortgage servicing revenue rates	0.27		%	0.29		%	(2)		bp					0.28		%	0.30		%	(2)		bp

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

~~Other Revenue~~

Other revenue decreased $1.1 million or 10 percent compared to the fourth quarter of 2021. Other revenue decreased $5.9 million or 36 percent compared to the first quarter of 2021 as a result of lower operating revenue from repossessed oil and gas assets due to the sale of properties during the prior year, which was largely offset by a reduction of expenses on the same properties.

- 98 -

Net gains on other assets, securities and derivatives

Other gains and losses, net decreased $7.7 million compared to the fourth quarter of 2021 primarily related to changes in the fair value of rabbi trust investments that are largely offset by lower deferred compensation expense. Other gains and losses, net decreased $11.8$6.0 million compared to the first quarter of 2021. The first quarter of 2021 included a $14.1 million gain on the sale of an equity interest received as part of the workout of a defaulted energy loan, partially offset by additional operating expenses and2022 primarily related to a write-down of a repossessed ~~oil and gas property, and~~equity interest in a ~~$3.6 million impairment of a merchant banking investment.~~midstream entity.

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. Three bulk mortgage servicing rights portfolios were acquired during the second quarter of 2022. These acquisitions added $3.5 billion in unpaid principal balance comprised of conventional, low note rate, strong performing loans.

Table 6 - Gain (Loss) on Mortgage Servicing Rights

(In thousands)


		Three Months Ended							Three Months Ended				Six Months Ended
		Mar. 31, 2022		Dec. 31, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		June 30, 2022		June 30, 2021
Loss on mortgage hedge derivative contracts, net	Loss on mortgage hedge derivative contracts, net	$	(46,694)	$	(4,862)	$	(27,705)	Loss on mortgage hedge derivative contracts, net	$	(13,639)	$	(46,694)	$	(60,333)	$	(8,941)
Gain (loss) on fair value option securities, net		(11,201)		1,418		(1,910)
Loss on fair value option securities, net								Loss on fair value option securities, net	(2,221)		(11,201)		(13,422)		(3,537)
Loss on economic hedge of mortgage servicing rights, net	Loss on economic hedge of mortgage servicing rights, net	(57,895)		(3,444)		(29,615)		Loss on economic hedge of mortgage servicing rights, net	(15,860)		(57,895)		(73,755)		(12,478)
Gain on change in fair value of mortgage servicing rights	Gain on change in fair value of mortgage servicing rights	49,110		7,859		33,874		Gain on change in fair value of mortgage servicing rights	17,485		49,110		66,595		20,833
Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	(8,785)		4,415		4,259		Gain (loss) on changes in fair value of mortgage servicing rights, net of economic hedges included in other operating revenue	1,625		(8,785)		(7,160)		8,355
Net interest revenue on fair value option securities1	Net interest revenue on fair value option securities1	383		259		393		Net interest revenue on fair value option securities1	275		383		658		734
Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	(8,402)	$	4,674	$	4,652	Total economic benefit (cost) of changes in the fair value of mortgage servicing rights, net of economic hedges	$	1,900	$	(8,402)	$	(6,502)	$	9,089

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

- 109 -

Other Operating Expense

Other operating expense for the ~~first~~second quarter of 2022 totaled ~~$277.6~~$273.7 million, a decrease of ~~$21.9 million compared to the fourth quarter of 2021, and a decrease of $18.2~~$4.0 million compared to the first quarter of ~~2021.~~2022.

Table 7 – Other Operating Expense

(In thousands)

Three Months Ended Increase (Decrease) %
Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) %
Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Regular compensation $ 96,474 $ 95,708 $ 766 1 % $ 97,211 $ (737) (1) %
Incentive compensation:
Cash-based 34,444 45,610 (11,166) (24) % 42,259 (7,815) (18) %
Share-based 3,304 7,153 (3,849) (54) % 4,570 (1,266) 28 %
Deferred compensation (2,124) 2,071 (4,195) N/A 2,263 (4,387) N/A
Total incentive compensation 35,624 54,834 (19,210) (35) % 49,092 (13,468) (27) %
Employee benefits 27,130 23,932 3,198 13 % 26,707 423 2 %
Total personnel expense 159,228 174,474 (15,246) (9) % 173,010 (13,782) (8) %
Business promotion 6,513 6,452 61 1 % 2,154 4,359 202 %
Charitable contributions to BOKF Foundation — 5,000 (5,000) N/A 4,000 (4,000) N/A
Professional fees and services 11,413 14,129 (2,716) (19) % 11,980 (567) (5) %
Net occupancy and equipment 30,855 26,897 3,958 15 % 26,662 4,193 16 %
Insurance 4,283 3,889 394 10 % 4,620 (337) (7) %
Data processing and communications 39,836 39,358 478 1 % 37,467 2,369 6 %
Printing, postage and supplies 3,689 2,935 754 26 % 3,440 249 7 %
Amortization of intangible assets 3,964 4,438 (474) (11) % 4,807 (843) (18) %
Mortgage banking costs 7,877 8,667 (790) (9) % 13,943 (6,066) (44) %
Other expense 9,960 13,256 (3,296) (25) % 13,701 (3,741) (27) %
Total other operating expense $ 277,618 $ 299,495 $ (21,877) (7) % $ 295,784 $ (18,166) (6) %
Average number of employees (full-time equivalent) 4,712 4,711 1 — % 4,902 (190) (4) %


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Regular compensation	$	98,322	$	96,474	$	1,848	2	%			$	194,796	$	193,292	$	1,504	1	%
Incentive compensation:
Cash-based	39,480		34,444		5,036		15	%			73,924		87,927		(14,003)		(16)	%
Share-based	(590)		3,304		(3,894)		(118)	%			2,714		4,821		(2,107)		(44)	%
Deferred compensation	(6,970)		(2,124)		(4,846)		N/A				(9,094)		6,169		(15,263)		N/A
Total incentive compensation	31,920		35,624		(3,704)		(10)	%			67,544		98,917		(31,373)		(32)	%
Employee benefits	24,681		27,130		(2,449)		(9)	%			51,811		52,836		(1,025)		(2)	%
Total personnel expense	154,923		159,228		(4,305)		(3)	%			314,151		345,045		(30,894)		(9)	%
Business promotion	6,325		6,513		(188)		(3)	%			12,838		4,898		7,940		162	%
Charitable contributions to BOKF Foundation	—		—		—		N/A				—		4,000		(4,000)		N/A
Professional fees and services	12,475		11,413		1,062		9	%			23,888		24,341		(453)		(2)	%
Net occupancy and equipment	27,489		30,855		(3,366)		(11)	%			58,344		53,295		5,049		9	%
Insurance	4,728		4,283		445		10	%			9,011		8,280		731		9	%
Data processing and communications	41,280		39,836		1,444		4	%			81,116		73,885		7,231		10	%
Printing, postage and supplies	3,929		3,689		240		7	%			7,618		7,725		(107)		(1)	%
Amortization of intangible assets	4,049		3,964		85		2	%			8,013		9,385		(1,372)		(15)	%
Mortgage banking costs	9,437		7,877		1,560		20	%			17,314		25,069		(7,755)		(31)	%
Other expense	9,020		9,960		(940)		(9)	%			18,980		31,013		(12,033)		(39)	%
Total other operating expense	$	273,655	$	277,618	$	(3,963)	(1)	%			$	551,273	$	586,936	$	(35,663)	(6)	%

Average number of employees (full-time equivalent)	4,763		4,712		51		1	%			4,735		4,873		(138)		(3)	%

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

- 10 -

Personnel expense

Personnel expense decreased ~~$15.2~~$4.3 million compared to the ~~fourth~~first quarter of 2021. Cash-based incentive compensation expense decreased $11.2 million from elevated levels in the fourth quarter of 2021. Deferred compensation expense, which is largely offset by a decrease in the value of related investments included in Other gains (losses), net, decreased $4.2 million.2022. Share-based compensation expense decreased ~~$3.8~~$3.9 million resulting from changes in vesting assumptions. ~~Employee~~Regular compensation expense increased as we recognized a full quarter of expense related to annual merit increases and employee benefits expense ~~increased $3.2 million~~decreased due to a seasonal changes in payroll taxes. An increase in ~~payroll taxes and retirement plan costs, partially offset~~cash-based incentive compensation expense was largely driven by agrowing commercial activity. A decrease in ~~employee healthcare costs.~~

~~Personnel expense decreased $13.8 million compared to the first quarter of 2021. Cash-based incentive compensation decreased $7.8 million primarily due to reduced trading revenues. Deferred~~deferred compensation expense ~~decreased $4.4 million; however, this is largely offset by a decrease~~reflected changes in the value of ~~related investments included in Other gains (losses), net. Share-based compensation~~rabbi trust assets.

Non-personnel operating expense ~~decreased $1.3~~

Non-personnel expense totaled $118.7 million ~~based on changes in vesting assumptions~~for the second quarter of ~~certain performance-based equity awards. Regular compensation expense was relatively~~2022, consistent with the first quarter of ~~2021 as the impact of annual standard merit increases was dampened by a decrease in the number of employees.~~

~~- 11 -~~

~~Non-personnel operating expense~~

Non-personnel expense decreased $6.6 million compared to the fourth quarter of 2021. The prior quarter included a $5.0 million charitable contribution to the BOKF Foundation. Decreases in professional fees and services expense and other expense were partially offset by an increase in occupancy and equipment expense.

~~Non-personnel operating expense decreased $4.4 million compared to the first quarter of 2021.~~2022. Mortgage banking costs ~~decreased $6.1~~increased $1.6 million, ~~largely~~primarily due to ~~a decrease in prepayments combined with lower~~additional accruals related to default servicing and loss mitigation costs on loans serviced for others. ~~The first quarter~~Increases in data processing and communications expense of ~~2021 also included a $4.0~~$1.4 million ~~charitable contribution to the BOKF Foundation that did not recur in the first quarter~~and professional fees and services expense of ~~2022. Other expense decreased $3.7~~$1.1 million ~~as a result of lower operating expense from repossessed oil and gas assets~~were due to ~~the sale of certain repossessed oil and gas properties during the second and third quarters of 2021; however, this was offset by decreased revenue from these same properties.~~ongoing technology projects. These ~~expense decreases~~increases were offset by a ~~$4.4 million increase in business promotion expense as advertising and travel expenses have returned to pre-pandemic levels, an increase of $4.2 million~~decrease in net occupancy and equipment expense ~~and a $2.4 million increase in data processing and communications expense due to continued investment in technology upgrades.~~of $3.4 million.

Income Taxes

The effective tax rate was 21.4 percent for the second quarter of 2022 and 20.6 percent for the first quarter of ~~2022, 22.7 percent for the first quarter of 2021 and 22.9 percent for the fourth quarter of 2021.~~2022. The effective rate for the ~~first~~second quarter of 2022 ~~decreased compared to~~ ~~fourth quarter of 2021~~increased primarily due to the ~~decrease~~increase in net income before tax. The effective tax ~~relative~~rates for the six months ended June 30, 2022 and June 30, 2021 were 21.1 percent and 22.6 percent, respectively. The effective rate decreased primarily due to ~~increased~~the increase in excess tax benefits from vested share-based ~~compensation. Income tax expense for the~~ ~~first quarter of 2022~~ ~~decreased~~ ~~$18.6 million~~ ~~compared to the fourth quarter of 2021, primarily due to the~~compensation and a decrease in ~~net income before~~the Oklahoma tax ~~for the~~ ~~first quarter of 2022~~.rate.

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 and capital costs. Credit costs are attributed to the lines of business based on net loans charged off or recovered. The difference between credit costs attributed to the lines of business and the consolidated provision for credit losses is attributed to Funds Management. In addition, we measure the performance of our business lines after allocations 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 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 wholesale borrowing rates or interest rate swap rates, adjusted for prepayment risk and liquidity risk. This method of transfer-pricing funds that support assets of the operating lines of business tends to insulate them from interest rate risk.

- 1211 -

The value of funds provided by the operating lines of business to the Funds Management unit is also based on rates that approximate wholesale market rates for funds with similar repricing and cash flow characteristics. Market rates are generally based on a proxy of wholesale borrowing rates 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 wholesale funding 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 wholesale funding rates and longer duration products are weighted towards the intermediate swap rates. The expected duration ranges from 30 days for certain rate-sensitive deposits to five years.

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 $41.4~~increased $62.8 million compared to the ~~fourth~~first quarter of ~~2021.~~2022. Net interest revenue ~~decreased $9.4~~increased $18.1 million, primarily due to ~~a reduction in~~ loan ~~fees~~growth and ~~two fewer days in the quarter. Net charge-offs~~ increased $7.2 million. Other operating revenue decreased $36.4 million primarily due to the impact of interest rate volatility on our trading activities, mortgage banking revenue and mortgage servicing rights valuation. Operating expense decreased $13.0 million, primarily attributable to reduced incentive compensation expense.

~~Net interest revenue increased by $20.7 million compared to the prior year, primarily driven by an increase in the spread~~spreads on deposits sold to our Funds Management unit. Net charge-offs decreased ~~$8.7 million compared to the first quarter of 2021.~~$6.8 million. Other operating revenue ~~decreased by $48.6~~increased $62.1 million ~~primarily~~largely due to ~~incurred~~trading activity returning to more normal levels following trading losses ~~and reduced mortgage banking revenue. These decreases were partially offset by increases~~incurred in ~~other revenue, fiduciary and asset management revenue, deposit service charges and fees, and transaction card revenue.~~the prior quarter from market disruptions. Operating expense ~~decreased $12.8~~increased $10.5 million ~~compared~~due to ~~the first quarter~~a combination of ~~2021, mainly from reduced mortgage banking costs in Consumer Banking and reduced~~increased incentive compensation ~~expense.~~expense largely related to growing commercial activity and additional accruals for mortgage loan default servicing and loss mitigation costs.

Table 8 -- Net Income by Line of Business

(In thousands)

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Commercial Banking $ 82,344 $ 83,514 $ (1,170) (1) % $ 69,673 $ 12,671 18 %
Consumer Banking (7,317) 6,810 (14,127) (207) % 6,948 (14,265) (205) %
Wealth Management (4,419) 21,700 (26,119) (120) % 19,382 (23,801) (123) %
Subtotal 70,608 112,024 (41,416) (37) % 96,003 (25,395) (26) %
Funds Management and other (8,120) 5,294 (13,414) N/A 50,057 (58,177) N/A
Total $ 62,488 $ 117,318 $ (54,830) (47) % $ 146,060 $ (83,572) (57) %


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Commercial Banking	$	104,797	$	82,344	$	22,453	27	%			$	187,141	$	142,305	$	44,836	32	%
Consumer Banking	1,239		(7,317)		8,556		117	%			(6,078)		8,646		(14,724)		(170)	%
Wealth Management	27,287		(4,521)		31,808		704	%			22,766		50,285		(27,519)		(55)	%
Subtotal	133,323		70,506		62,817		89	%			203,829		201,236		2,593		1	%
Funds Management and other	(477)		(8,018)		7,541		N/A				(8,495)		111,245		(119,740)		N/A
Total	$	132,846	$	62,488	$	70,358	113	%			$	195,334	$	312,481	$	(117,147)	(37)	%

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

- 1312 -

Commercial Banking

Commercial Banking contributed ~~$82.3~~$104.8 million to consolidated net income in the ~~first~~second quarter of 2022, ~~a decrease~~an increase of ~~$1.2~~$22.5 million or 127 percent compared to the ~~fourth quarter of 2021 and an increase of $12.7 million over the~~ first quarter of ~~2021.~~2022.

Table 9 -- Commercial Banking

(Dollars in thousands)

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Net interest revenue from external sources $ 147,590 $ 148,948 $ (1,358) (1) % $ 155,799 $ (8,209) (5) %
Net interest expense from internal sources (10,579) (8,225) (2,354) 29 % (25,794) 15,215 (59) %
Total net interest revenue 137,011 140,723 (3,712) (3) % 130,005 7,006 5 %
Net loans charged off (recovered) 5,343 (1,933) 7,276 (376) % 13,985 (8,642) (62) %
Net interest revenue after net loans charged off (recovered) 131,668 142,656 (10,988) (8) % 116,020 15,648 13 %
Fees and commissions revenue 56,964 57,414 (450) (1) % 49,847 7,117 14 %
Other gains (losses), net 463 629 (166) N/A (3,268) 3,731 N/A
Other operating revenue 57,427 58,043 (616) (1) % 46,579 10,848 23 %
Personnel expense 38,927 47,242 (8,315) (18) % 39,252 (325) (1) %
Non-personnel expense 26,187 27,217 (1,030) (4) % 27,727 (1,540) (6) %
Other operating expense 65,114 74,459 (9,345) (13) % 66,979 (1,865) (3) %
Net direct contribution 123,981 126,240 (2,259) (2) % 95,620 28,361 30 %
Gain (loss) on financial instruments, net (204) 43 (247) N/A 33 (237) N/A
Gain on repossessed assets, net 1,793 646 1,147 N/A 12,737 (10,944) N/A
Corporate expense allocations 16,246 12,926 3,320 26 % 12,734 3,512 28 %
Income before taxes 109,324 114,003 (4,679) (4) % 95,656 13,668 14 %
Federal and state income tax 26,980 30,489 (3,509) (12) % 25,983 997 4 %
Net income $ 82,344 $ 83,514 $ (1,170) (1) % $ 69,673 $ 12,671 18 %
Average assets $ 29,823,905 $ 29,451,007 $ 372,898 1 % $ 28,047,052 $ 1,776,853 6 %
Average loans 16,696,428 16,334,695 361,733 2 % 17,522,520 (826,092) (5) %
Average deposits 19,595,260 19,537,285 57,975 — % 16,130,168 3,465,092 21 %
Average invested capital 2,020,925 2,021,214 (289) — % 2,157,062 (136,137) (6) %


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Net interest revenue from external sources	$	172,974	$	147,590	$	25,384	17	%			$	320,564	$	307,741	$	12,823	4	%
Net interest expense from internal sources	(6,452)		(10,579)		4,127		39	%			(17,031)		(46,835)		29,804		64	%
Total net interest revenue	166,522		137,011		29,511		22	%			303,533		260,906		42,627		16	%
Net loans charged off (recovered)	(1,502)		5,343		(6,845)		(128)	%			3,841		30,253		(26,412)		(87)	%
Net interest revenue after net loans charged off (recovered)	168,024		131,668		36,356		28	%			299,692		230,653		69,039		30	%

Fees and commissions revenue	59,881		56,964		2,917		5	%			116,845		113,215		3,630		3	%
Other gains (losses), net	1,807		463		1,344		N/A				2,270		(1,367)		3,637		N/A
Other operating revenue	61,688		57,427		4,261		7	%			119,115		111,848		7,267		6	%

Personnel expense	42,215		38,927		3,288		8	%			81,142		79,100		2,042		3	%
Non-personnel expense	27,794		26,187		1,607		6	%			53,981		59,230		(5,249)		(9)	%
Other operating expense	70,009		65,114		4,895		8	%			135,123		138,330		(3,207)		(2)	%

Net direct contribution	159,703		123,981		35,722		29	%			283,684		204,171		79,513		39	%
Gain (loss) on financial instruments, net	61		(204)		265		N/A				(143)		67		(210)		N/A
Gain (loss) on repossessed assets, net	(4,515)		1,793		(6,308)		N/A				(2,722)		16,302		(19,024)		N/A
Corporate expense allocations	16,634		16,246		388		2	%			32,880		25,246		7,634		30	%
Income before taxes	138,615		109,324		29,291		27	%			247,939		195,294		52,645		27	%
Federal and state income tax	33,818		26,980		6,838		25	%			60,798		52,989		7,809		15	%
Net income	$	104,797	$	82,344	$	22,453	27	%			$	187,141	$	142,305	$	44,836	32	%

Average assets	$	29,269,712	$	29,823,905	$	(554,193)	(2)	%			$	29,545,278	$	28,104,137	$	1,441,141	5	%
Average loans	17,336,841		16,696,428		640,413		4	%			17,018,404		17,250,711		(232,307)		(1)	%
Average deposits	18,933,766		19,595,260		(661,494)		(3)	%			19,262,686		16,592,511		2,670,175		16	%
Average invested capital	2,007,878		2,020,925		(13,047)		(1)	%			2,012,227		2,123,473		(111,246)		(5)	%

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 $3.7~~increased $29.5 million ~~compared to~~or 22 percent over the ~~fourth~~first quarter of ~~2021,~~2022, primarily due to ~~reduced~~ loan ~~fees~~growth and ~~two fewer days in~~increased spreads on deposits sold to the ~~quarter.~~Funds Management unit.

Fees and commissions revenue ~~was~~increased $2.9 million or 5 percent, largely due to the timing of loan syndication activity. Operating expense increased $4.9 million or 8 percent compared to the first quarter of 2022, primarily due to increased incentive compensation costs with growth in loans and syndication activity. The second quarter also included a $5.8 million write-down of a repossessed equity interest in a midstream energy entity. Corporate expense allocations were consistent with the prior quarter. Operating expense decreased $9.3 million or 13 percent compared to the fourth quarter of 2021, primarily due to a decline in incentive compensation from elevated levels in the prior quarter. Corporate expense allocations increased $3.3 million or 26 percent primarily related to project resources.

- 13 -

Average outstanding balance of loans attributed to Commercial Banking increased ~~$362~~$640 million or 24 percent over the ~~fourth~~first quarter of ~~2021~~2022 to ~~$16.7~~$17.3 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.

~~- 14 -~~

Average deposits attributed to Commercial Banking were ~~$19.6~~$18.9 billion for ~~first~~second quarter of 2022, a ~~$58~~$661 million ~~increase over~~decrease compared to the ~~fourth~~first quarter of ~~2021.~~2022. See Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital for further discussion of change.

Net interest revenue increased $7.0 million over the first quarter of 2021, largely driven by increased deposit balances and improved spreads. Net loans charged-off decreased $8.6 million. Fees and commissions revenue increased $7.1 million or 14 percent compared to the first quarter of 2021 due to growth in customer hedging revenue and an increase in revenues from processing transactions on behalf of the members of our TransFund EFT network. These increases were partially offset by reduced operating revenue from repossessed oil and gas assets due to the sale of properties during the prior year, which was largely offset by a reduction of expenses on the same properties. Corporate expense allocations increased $3.5 million or 28 percent compared to the prior year related to increased project resources.

~~Average loan balances decreased $826 million or 5 percent and average deposits increased $3.5 billion or 21 percent over the first quarter of 2021.~~

- 1514 -

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 ~~had a~~contributed $1.2 million to consolidated net ~~loss of $7.3 million~~income for the ~~first~~second quarter of 2022, compared to a prior quarter net loss of $7.3 million. Changes in the fair value of mortgage servicing rights, net of economic hedges, increased pre-tax net income for the second quarter of ~~$6.8~~2022 by $1.9 million ~~largely due~~compared to ~~lower mortgage production volumes and narrowing margins combined with lower spreads on deposits sold to our Funds Management unit.~~an $8.4 million decrease in pre-tax net income in the first quarter of 2022.

Table 10 -- Consumer Banking

(Dollars in thousands)

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Net interest revenue from external sources $ 16,915 $ 16,650 $ 265 2 % $ 16,686 $ 229 1 %
Net interest revenue from internal sources 10,292 13,735 (3,443) (25) % 4,288 6,004 140 %
Total net interest revenue 27,207 30,385 (3,178) (10) % 20,974 6,233 30 %
Net loans charged off 1,112 1,198 (86) (7) % 1,136 (24) (2) %
Net interest revenue after net loans charged off 26,095 29,187 (3,092) (11) % 19,838 6,257 32 %
Fees and commissions revenue 33,977 38,944 (4,967) (13) % 52,300 (18,323) (35) %
Other losses, net (16) — (16) N/A (18) 2 N/A
Other operating revenue 33,961 38,944 (4,983) (13) % 52,282 (18,321) (35) %
Personnel expense 20,984 21,689 (705) (3) % 21,908 (924) (4) %
Non-personnel expense 27,805 30,347 (2,542) (8) % 33,714 (5,909) (18) %
Total other operating expense 48,789 52,036 (3,247) (6) % 55,622 (6,833) (12) %
Net direct contribution 11,267 16,095 (4,828) (30) % 16,498 (5,231) (32) %
Loss on financial instruments, net (57,895) (3,444) (54,451) N/A (29,616) (28,279) N/A
Change in fair value of mortgage servicing rights 49,110 7,859 41,251 N/A 33,874 15,236 N/A
Gain on repossessed assets, net 45 44 1 N/A 41 4 N/A
Corporate expense allocations 12,080 11,420 660 6 % 11,475 605 5 %
Income (loss) before taxes (9,553) 9,134 (18,687) (205) % 9,322 (18,875) (202) %
Federal and state income tax (2,236) 2,324 (4,560) (196) % 2,374 (4,610) (194) %
Net income (loss) $ (7,317) $ 6,810 $ (14,127) (207) % $ 6,948 $ (14,265) (205) %
Average assets $ 10,273,890 $ 10,186,797 $ 87,093 1 % $ 9,755,539 $ 518,351 5 %
Average loans 1,672,346 1,705,222 (32,876) (2) % 1,823,732 (151,386) (8) %
Average deposits 8,746,622 8,682,437 64,185 1 % 8,082,443 664,179 8 %
Average invested capital 255,758 249,446 6,312 3 % 256,188 (430) — %


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Net interest revenue from external sources	$	16,784	$	16,915	$	(131)	(1)	%			$	33,699	$	34,238	$	(539)	(2)	%
Net interest revenue from internal sources	17,002		10,292		6,710		65	%			27,294		11,681		15,613		134	%
Total net interest revenue	33,786		27,207		6,579		24	%			60,993		45,919		15,074		33	%
Net loans charged off	1,196		1,112		84		8	%			2,308		1,561		747		48	%
Net interest revenue after net loans charged off	32,590		26,095		6,495		25	%			58,685		44,358		14,327		32	%

Fees and commissions revenue	30,101		33,977		(3,876)		(11)	%			64,078		90,014		(25,936)		(29)	%
Other losses, net	(12)		(16)		4		N/A				(28)		(18)		(10)		N/A
Other operating revenue	30,089		33,961		(3,872)		(11)	%			64,050		89,996		(25,946)		(29)	%

Personnel expense	21,510		20,984		526		3	%			42,494		43,016		(522)		(1)	%
Non-personnel expense	31,150		27,805		3,345		12	%			58,955		65,060		(6,105)		(9)	%
Total other operating expense	52,660		48,789		3,871		8	%			101,449		108,076		(6,627)		(6)	%

Net direct contribution	10,019		11,267		(1,248)		(11)	%			21,286		26,278		(4,992)		(19)	%
Loss on financial instruments, net	(15,860)		(57,895)		42,035		N/A				(73,755)		(12,479)		(61,276)		N/A
Change in fair value of mortgage servicing rights	17,485		49,110		(31,625)		N/A				66,595		20,833		45,762		N/A
Gain on repossessed assets, net	93		45		48		N/A				138		41		97		N/A
Corporate expense allocations	10,120		12,080		(1,960)		(16)	%			22,200		23,073		(873)		(4)	%
Income (loss) before taxes	1,617		(9,553)		11,170		117	%			(7,936)		11,600		(19,536)		(168)	%
Federal and state income tax	378		(2,236)		2,614		117	%			(1,858)		2,954		(4,812)		(163)	%
Net income (loss)	$	1,239	$	(7,317)	$	8,556	117	%			$	(6,078)	$	8,646	$	(14,724)	(170)	%

Average assets	$	10,338,191	$	10,273,890	$	64,301	1	%			$	10,306,218	$	9,922,431	$	383,787	4	%
Average loans	1,669,830		1,672,346		(2,516)		—	%			1,671,081		1,804,883		(133,802)		(7)	%
Average deposits	8,876,469		8,746,622		129,847		1	%			8,811,904		8,276,811		535,093		6	%
Average invested capital	244,188		255,758		(11,570)		(5)	%			248,044		251,293		(3,249)		(1)	%

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 ~~decreased $3.2~~increased $6.6 million or 1024 percent compared to the ~~fourth~~first quarter of ~~2021,~~2022, mainly due to ~~lower spreads~~an increase in the spread on deposits sold to our Funds Management unit. Average consumer deposits grew ~~$64.2~~$130 million or 1 percent over the ~~fourth~~first quarter of ~~2021.~~2022.

Operating revenue decreased $3.9 million or 11 percent compared to the prior quarter. Mortgage production volume decreased $102 million to $306 million and production revenue as a percentage of production volumes decreased 140 basis points resulting in a $5.3 million decrease in mortgage banking revenues. Operating expense increased $3.9 million or 8 percent. Business promotion expense increased $1.8 million and mortgage banking costs increased $1.6 million related to accruals for default servicing and loss mitigation costs. Corporate expense allocations decreased $2.0 million or 16 percent compared to the first quarter of 2022.

- 16 -

Operating revenue decreased $5.0 million compared to the prior quarter. Mortgage production volume decreased $93 million to $408 million and production revenue as a percentage of production volumes decreased 76 basis points resulting in a $4.7 million decrease in mortgage banking revenues. Operating expense decreased $3.2 million, primarily due to decreased professional fees and services expense and mortgage banking costs. Corporate expense allocations were consistent with the fourth quarter of 2021.

The net cost of the changes in fair value of mortgage servicing rights and related economic hedges was $8.4 million for the first quarter of 2022 compared to a net benefit of $4.7 million for the fourth quarter of 2021 and a net benefit of $4.3 million in the first quarter of 2021. Interest rate volatility affected the effectiveness of our mortgage servicing rights hedging strategy.

Net interest revenue from Consumer Banking activities increased $6.2 million or 30 percent over the first quarter of 2021, primarily due to increased deposit balances combined with an increase in the spread on deposits sold to our Funds Management unit, as well as improved loan spreads. Fees and commissions revenue decreased $18.3 million or 35 percent compared to the first quarter of 2021. Mortgage banking revenue decreased $20.4 million due to lower mortgage production volume and compression in production revenue as a percentage of production volume. Deposit service charges increased $1.7 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 $6.8 million due to a decrease in mortgage banking costs.

~~- 17 -~~

Wealth Management

Wealth Management ~~had~~contributed $27.3 million to consolidated net income in the second quarter of 2022 compared to a net loss of ~~$4.4~~$4.5 million in the first quarter of ~~2022 compared~~2022. Trading activity has returned to ~~net income of $21.7 million~~more normal levels following disruption in the ~~fourth quarter of 2021,~~fixed income markets related to uncertainty around rising inflation and ~~net income of $19.4 million~~interest rates that occurred in the first quarter of ~~2021. The first quarter of 2022 was impacted by a net loss on trading activities.~~2022.

Table 11 -- Wealth Management

(Dollars in thousands)

Three Months Ended Increase (Decrease) % Increase (Decrease) Three Months Ended
Mar. 31, 2021 Increase (Decrease) % Increase (Decrease)
Mar. 31, 2022 Dec. 31, 2021
Net interest revenue from external sources $ 56,231 $ 57,239 $ (1,008) (2) % $ 48,554 $ 7,677 16 %
Net interest revenue (expense) from internal sources (465) 990 (1,455) (147) % (200) (265) 133 %
Total net interest revenue 55,766 58,229 (2,463) (4) % 48,354 7,412 15 %
Net loans recovered (71) (71) — — % (29) (42) 145 %
Net interest revenue after net loans recovered 55,837 58,300 (2,463) (4) % 48,383 7,454 15 %
Fees and commissions revenue 25,023 56,275 (31,252) (56) % 65,684 (40,661) (62) %
Other gains (losses), net (5) (472) 467 N/A 439 (444) N/A
Other operating revenue 25,018 55,803 (30,785) (55) % 66,123 (41,105) (62) %
Personnel expense 52,894 51,871 1,023 2 % 57,414 (4,520) (8) %
Non-personnel expense 21,601 23,076 (1,475) (6) % 21,151 450 2 %
Other operating expense 74,495 74,947 (452) (1) % 78,565 (4,070) (5) %
Net direct contribution 6,360 39,156 (32,796) (84) % 35,941 (29,581) (82) %
Corporate expense allocations 12,062 9,971 2,091 21 % 9,887 2,175 22 %
Income (loss) before taxes (5,702) 29,185 (34,887) (120) % 26,054 (31,756) (122) %
Federal and state income tax (1,283) 7,485 (8,768) (117) % 6,672 (7,955) (119) %
Net income (loss) $ (4,419) $ 21,700 $ (26,119) (120) % $ 19,382 $ (23,801) (123) %
Average assets $ 21,323,795 $ 20,725,903 $ 597,892 3 % $ 18,645,865 $ 2,677,930 14 %
Average loans 2,118,780 2,065,261 53,519 3 % 1,917,973 200,807 10 %
Average deposits 9,619,323 9,194,019 425,304 5 % 9,706,295 (86,972) (1) %
Average invested capital 305,597 309,038 (3,441) (1) % 313,355 (7,758) (2) %


	Three Months Ended				Increase (Decrease)		% Increase (Decrease)				Six Months Ended				Increase (Decrease)		% Increase (Decrease)
	June 30, 2022		Mar. 31, 2022						June 30, 2022	June 30, 2021
Net interest revenue from external sources	$	39,412	$	56,231	$	(16,819)	(30)	%			$	95,643	$	101,520	$	(5,877)	(6)	%
Net interest expense from internal sources	(1,665)		(465)		(1,200)		(258)	%			(2,130)		(873)		(1,257)		(144)	%
Total net interest revenue	37,747		55,766		(18,019)		(32)	%			93,513		100,647		(7,134)		(7)	%
Net loans recovered	(60)		(71)		11		15	%			(131)		(83)		(48)		(58)	%
Net interest revenue after net loans recovered	37,807		55,837		(18,030)		(32)	%			93,644		100,730		(7,086)		(7)	%

Fees and commissions revenue	86,771		25,023		61,748		247	%			111,794		144,525		(32,731)		(23)	%
Other gains (losses), net	(10)		(5)		(5)		N/A				(15)		747		(762)		N/A
Other operating revenue	86,761		25,018		61,743		247	%			111,779		145,272		(33,493)		(23)	%

Personnel expense	54,787		52,950		1,837		3	%			107,737		116,246		(8,509)		(7)	%
Non-personnel expense	21,606		21,669		(63)		—	%			43,275		41,941		1,334		3	%
Other operating expense	76,393		74,619		1,774		2	%			151,012		158,187		(7,175)		(5)	%

Net direct contribution	48,175		6,236		41,939		673	%			54,411		87,815		(33,404)		(38)	%


Corporate expense allocations	12,503		12,072		431		4	%			24,575		20,249		4,326		21	%
Income (loss) before taxes	35,672		(5,836)		41,508		711	%			29,836		67,566		(37,730)		(56)	%
Federal and state income tax	8,385		(1,315)		9,700		738	%			7,070		17,281		(10,211)		(59)	%
Net income (loss)	$	27,287	$	(4,521)	$	31,808	704	%			$	22,766	$	50,285	$	(27,519)	(55)	%

Average assets	$	16,902,721	$	21,323,795	$	(4,421,074)	(21)	%			$	19,101,045	$	18,924,987	$	176,058	1	%
Average loans	2,157,771		2,118,780		38,991		2	%			2,138,383		1,943,382		195,001		10	%
Average deposits	8,482,785		9,619,323		(1,136,538)		(12)	%			9,047,915		9,700,777		(652,862)		(7)	%
Average invested capital	267,189		305,597		(38,408)		(13)	%			279,992		311,687		(31,695)		(10)	%

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

Combined net interest revenue and fee revenue ~~decreased $33.7 million. Combined~~increased $43.7 million or 54 percent. Total revenue from trading activities ~~decreased $43.3~~increased $47.4 million compared to the ~~fourth~~first quarter of ~~2021, primarily due to~~2022. Market disruptions during the first quarter of 2022 reduced ~~customer~~ demand for low-coupon, fixed-rate U.S. government agency residential mortgage-backed securities. ~~Fiduciary~~These securities were fully sold during the second quarter. Growth in money market fund revenue, seasonal tax preparation fees and a reduction in fee waivers combined to increase fiduciary and asset management revenue ~~and retail brokerage revenue were relatively~~$6.6 million. This increase was partially offset by a $3.2 million reduction in trust business line fees related to decreased asset under management billable fees, consistent with ~~the prior quarter as decreases~~market driven declines in ~~revenue related to~~equities, which account for a third of the assets under management or ~~administration were offset by improved money market fund fees.~~administration. Operating expense ~~was consistent with prior quarter.~~increased $1.8 million or 2 percent, primarily due to increased volume-driven incentive compensation costs and a full quarter's impact of annual merit increases.

- 17 -

Average outstanding loans attributed to the Wealth Management segment increased ~~$54~~$39 million or ~~3 percent and average Wealth Management deposits increased $425 million or 5~~2 percent. ~~Deposit balances began to decline in the second half of March 2022 from elevated levels in the fourth quarter of 2021.~~

~~- 18 -~~

Combined net interest revenue and fee revenue from trading activities decreased by $51.2 million or 97 percent compared to the prior year due to reduced demand for agency residential mortgage-backed securities. Fiduciary and asset management revenue increased $5.2 million due to growth in trust fees and managed account fees as a result of higher client asset balances. Operating expense decreased $4.1 million largely due to reduced trading related incentive compensation expense.

~~Average loans attributed to the Wealth Management segment grew $201 million or 10 percent to $2.1 billion.~~ Average Wealth Management deposits decreased ~~$87.0 million~~$1.1 billion or ~~1 percent.~~12 percent to $8.5 billion as customers redeployed deposits into higher yielding alternatives.

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 ~~March 31,~~June 30, 2022 and December 31, 2021.

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 decreased ~~$4.2~~$2.0 billion to ~~$4.9~~$2.9 billion during the ~~first~~second quarter of ~~2022.~~2022 as we reduced our inventory of low-coupon mortgage-backed securities and repositioned the trading portfolio in response to rising mortgage interest rates. 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.

At ~~March 31,~~June 30, 2022, the carrying value of investment (held-to-maturity) securities was ~~$184 million,~~$2.6 billion, including a ~~$633~~$717 thousand allowance for expected credit losses compared to ~~$210~~$184 million at ~~December~~March 31, ~~2021~~2022 with a ~~$555~~$633 thousand allowance for expected credit losses. The fair value of investment securities was $2.6 billion at June 30, 2022 and $191 million at March 31, ~~2022 and $231 million at December 31, 2021.~~2022. Investment securities consist primarily of residential mortgage-backed securities issued by U.S. government agencies, intermediate and long-term, fixed rate Oklahoma and Texas municipal bonds, and taxable Texas school construction bonds. During the second quarter of 2022, the Company transferred certain U.S. government agency mortgage-backed securities from the available for sale portfolio to the investment securities portfolio to limit the effect of future rate increases on the tangible common equity ratio. No gains or losses were recognized in the Consolidated Statements of Earnings at the time of the transfer. At the time of transfer, the fair value totaled $2.4 billion, amortized cost totaled $2.7 billion and the pretax unrealized loss totaled $268 million. Transfers of debt securities into the investment securities portfolio are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in Accumulated Other Comprehensive Income and in the carrying value of the investment securities portfolio. Such amounts are amortized over the estimated remaining life of the security as an adjustment to yield, offsetting the related amortization of the premium or accretion of the discount on the transferred securities.

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 ~~$13.4~~$10.7 billion at June 30, 2022, a $2.8 billion decrease compared to March 31, 2022, ~~a $377 million increase compared~~primarily due to ~~December 31, 2021. The increase in~~ the ~~cost basis~~transfer of securities from the available for sale portfolio to the investment securities ~~was partially offset by a $263 million decrease in fair value due to rising interest rates.~~portfolio discussed above. At ~~March 31,~~June 30, 2022, 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 ~~March 31,~~June 30, 2022 is ~~3.6~~3.4 years. Management estimates the duration extends to ~~4.2~~3.8 years assuming an immediate 200 basis point upward shock. The estimated duration contracts to ~~3.1~~3.0 years assuming a 100 basis point decline in the current low rate environment. Management also regularly monitors the impact of interest rate risk on the available for sale securities portfolio on our tangible equity ratio under various shock scenarios. Throughout the ~~first~~second quarter of 2022, this exposure was reported and monitored by management, and the portfolio's actual performance remained within expectations.

- 18 -

Bank-Owned Life Insurance

We have approximately $410 million of bank-owned life insurance at June 30, 2022. This investment is expected to provide a long-term source of earnings to support existing employee benefit programs. Approximately $316 million is held in separate accounts. Our separate account holdings are invested in diversified portfolios of investment-grade fixed income securities and cash equivalents, including U.S. Treasury and Agency securities, residential mortgage-backed securities, corporate debt, asset-backed and commercial mortgage-backed securities. The portfolios are managed by unaffiliated professional managers within parameters established in the portfolio’s investment guidelines. The cash surrender value of certain life insurance policies is further supported by a stable value wrap, which protects against changes in the fair value of the investments. As of June 30, 2022, the fair value of investments held in separate accounts covered by the stable value wrap was approximately $291 million. As the underlying fair value of the investments held in separate accounts at June 30, 2022 was below the net book value of the investments, $23 million of cash surrender value was supported by the stable value wrap. Future rate increases may cause impairment as the fair value deterioration could exceed the stable value wrap protection. The stable value wrap is provided by a domestic financial institution. The remaining cash surrender value of $94 million primarily represents the cash surrender value of policies held in general accounts and other amounts due from various insurance companies.

- 19 -

Loans

The aggregate loan portfolio before allowance for loan losses totaled ~~$20.7~~$21.3 billion at ~~March 31,~~June 30, 2022, a ~~$469~~$617 million increase over ~~December~~March 31, ~~2021.~~2022. Core loans, which exclude paycheck protection program loans, ~~increased $608~~grew by $711 million, primarily due to growth in ~~both~~ commercial ~~and commercial real estate~~ loans. Unfunded loan commitments also grew by $979 million during the second quarter.

Table 12 -- Loans

(In thousands


		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Commercial:	Commercial:											Commercial:
Healthcare	Healthcare	$	3,441,732	$	3,414,940	$	3,347,641	$	3,381,261	$	3,290,758	Healthcare	$	3,696,963	$	3,441,732	$	3,414,940	$	3,347,641	$	3,381,261
Services	Services	3,351,495		3,367,193		3,323,422		3,389,756		3,421,948		Services	3,421,493		3,351,495		3,367,193		3,323,422		3,389,756
Energy	Energy	3,197,667		3,006,884		2,814,059		3,011,331		3,202,488		Energy	3,393,072		3,197,667		3,006,884		2,814,059		3,011,331
General business	General business	2,892,295		2,717,448		2,690,018		2,690,559		2,742,590		General business	3,067,169		2,892,295		2,717,448		2,690,018		2,690,559
Total commercial	Total commercial	12,883,189		12,506,465		12,175,140		12,472,907		12,657,784		Total commercial	13,578,697		12,883,189		12,506,465		12,175,140		12,472,907

Commercial real estate:	Commercial real estate:											Commercial real estate:
Office	Office	1,097,516		1,040,963		1,030,755		1,073,346		1,094,060		Office	1,100,115		1,097,516		1,040,963		1,030,755		1,073,346
Industrial	Industrial	911,928		766,125		890,316		824,577		789,437		Industrial	953,626		911,928		766,125		890,316		824,577
Multifamily	Multifamily	867,288		786,404		875,586		964,824		1,227,915		Multifamily	878,565		867,288		786,404		875,586		964,824
Retail	Retail	667,561		679,917		766,402		784,445		787,648		Retail	637,304		667,561		679,917		766,402		784,445
Residential construction and land development	Residential construction and land development	120,506		120,016		118,416		128,939		119,079		Residential construction and land development	111,575		120,506		120,016		118,416		128,939
Other commercial real estate	Other commercial real estate	436,157		437,900		435,417		470,861		485,208		Other commercial real estate	424,963		436,157		437,900		435,417		470,861
Total commercial real estate	Total commercial real estate	4,100,956		3,831,325		4,116,892		4,246,992		4,503,347		Total commercial real estate	4,106,148		4,100,956		3,831,325		4,116,892		4,246,992

Paycheck protection program	Paycheck protection program	137,365		276,341		536,052		1,121,583		1,848,550		Paycheck protection program	43,140		137,365		276,341		536,052		1,121,583

Loans to individuals:	Loans to individuals:											Loans to individuals:
Residential mortgage	Residential mortgage	1,723,506		1,722,170		1,747,243		1,772,627		1,797,478		Residential mortgage	1,784,729		1,723,506		1,722,170		1,747,243		1,772,627
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	322,581		354,173		376,986		413,806		420,051		Residential mortgage guaranteed by U.S. government agencies	293,838		322,581		354,173		376,986		413,806
Personal	Personal	1,506,832		1,515,206		1,395,623		1,388,534		1,306,637		Personal	1,484,596		1,506,832		1,515,206		1,395,623		1,388,534
Total loans to individuals	Total loans to individuals	3,552,919		3,591,549		3,519,852		3,574,967		3,524,166		Total loans to individuals	3,563,163		3,552,919		3,591,549		3,519,852		3,574,967

Total	Total	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449	$	22,533,847	Total	$	21,291,148	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449

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 ~~$12.9~~$13.6 billion or 6264 percent of the loan portfolio at June 30, 2022, a $696 million increase over March 31, 2022, ~~a $377 million increase compared to December 31, 2021, primarily due to growth~~growing in ~~the energy~~all commercial loan ~~portfolio. Healthcare and general business loan balances also increased, partially offset by a decrease in services loans.~~categories.

- 20 -

Approximately 7775 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 45 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 ~~$3.2~~$3.4 billion or 1516 percent of total loans at ~~March 31,~~June 30, 2022, a ~~$191~~$195 million increase over ~~December~~March 31, ~~2021.~~2022. Approximately ~~$2.4~~$2.6 billion of energy loans were to oil and gas producers, a ~~$235~~$188 million increase over ~~December~~March 31, ~~2021.~~2022. 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 72 percent of the committed production loans are secured by properties primarily producing oil and 28 percent of the committed production loans are secured by properties primarily producing natural gas.

Loans to midstream oil and gas companies totaled ~~$630~~$640 million at June 30, 2022, a $10 million increase compared to March 31, ~~2022, a $16 million decrease compared to December 31, 2021.~~2022. Loans to borrowers that provide services to the energy industry totaled ~~$121~~$134 million at ~~March 31,~~June 30, 2022, ~~a decrease~~an increase of ~~$22~~$14 million. Loans to other energy borrowers, including those engaged in wholesale or retail energy sales, totaled ~~$24~~$8.2 million, a decrease of ~~$6.7~~$15 million compared to the prior quarter.

Unfunded energy loan commitments were ~~$3.0~~$3.4 billion at June 30, 2022, growing $342 million over March 31, ~~2022, a $23 million increase over December 31, 2021.~~2022.

The healthcare sector of the loan portfolio totaled ~~$3.4~~$3.7 billion or 17 percent of total loans. Healthcare loans increased ~~$27~~$255 million over ~~December~~March 31, ~~2021,~~2022, primarily due to growth in loans to ~~acute care and specialty hospital sectors.~~senior housing facilities. This was partially offset by a decline in balances to other medical practices compared to 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 billion or 16 percent of total loans, a ~~$16~~$70 million ~~decrease~~increase 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 $1.6 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 totaled ~~$2.9~~$3.1 billion or 14 percent of total loans, an increase of $175 million over the prior quarter. General business loans consist of ~~$1.5~~$1.6 billion of wholesale/retail loans and ~~$1.4~~$1.5 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 ~~March 31,~~June 30, 2022, the outstanding principal balance of these loans totaled ~~$4.0~~$4.6 billion, including ~~$1.8~~$2.0 billion of energy loans. Substantially all of these loans are to borrowers with local market relationships. We serve as the agent lender in approximately 2322 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.

- 21 -

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 outstanding balance of commercial real estate loans increased ~~$270~~$5.2 million over ~~December~~March 31, ~~2021~~2022 to $4.1 billion or 2019 percent of total loans at ~~March 31, 2022, as the recent payoff trend in this portfolio has abated.~~June 30, 2022. Loans secured by industrial facilities ~~increased $146~~grew by $42 million to ~~$912~~$954 million. Multifamily residential loans increased ~~$81~~$11 million to ~~$867~~$879 million at ~~March 31,~~June 30, 2022. Loans secured by ~~office~~retail facilities ~~increased $57~~decreased $30 million to ~~$1.1 billion.~~$637 million and loans secured by other commercial real estate properties decreased $11 million to $425 million.

Approximately 7069 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 910 percent of the segment. All other states represent less than 5 percent individually.

Paycheck Protection Program

We actively participated 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 provided fully forgivable loans when utilized for qualified expenditures, including to help small businesses maintain payrolls during the COVID-19 pandemic. ~~These~~The remaining loans in this portfolio generally have a contractual term of ~~two~~five 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~~Remaining unaccreted origination fees will be recognized when the loan is paid. At March 31, 2022, approximately $24 million of PPP loans from the initial rounds remain outstanding, with an insignificant unaccreted origination fee balance remaining.

The Company also participated in the most recent round of PPP, which began on January 19, 2021. Approximately $114 million of PPP loans from this 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 $3.5 millionwere not significant at ~~March 31,~~June 30, 2022.

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.

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.

~~- 22 -~~

Approximately 9291 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.

- 22 -

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. After peaking in the second quarter of 2021, these loans are migrating toward pre-COVID levels through payoffs or sales.

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.

- 23 -

Table 13-- Loans Managed by Primary Geographical Market

(In thousands)


		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Texas:	Texas:											Texas:
Commercial	Commercial	$	6,254,883	$	6,068,700	$	5,815,562	$	5,690,901	$	5,748,345	Commercial	$	6,631,658	$	6,254,883	$	6,068,700	$	5,815,562	$	5,690,901
Commercial real estate	Commercial real estate	1,345,105		1,253,439		1,383,871		1,403,751		1,511,714		Commercial real estate	1,339,452		1,345,105		1,253,439		1,383,871		1,403,751
Paycheck protection program	Paycheck protection program	31,242		81,654		115,623		342,933		537,899		Paycheck protection program	14,040		31,242		81,654		115,623		342,933
Loans to individuals	Loans to individuals	957,320		942,982		901,121		885,619		848,194		Loans to individuals	934,856		957,320		942,982		901,121		885,619
Total Texas	Total Texas	8,588,550		8,346,775		8,216,177		8,323,204		8,646,152		Total Texas	8,920,006		8,588,550		8,346,775		8,216,177		8,323,204

Oklahoma:	Oklahoma:											Oklahoma:
Commercial	Commercial	2,883,663		2,633,014		2,590,887		2,840,560		2,975,477		Commercial	3,125,764		2,883,663		2,633,014		2,590,887		2,840,560
Commercial real estate	Commercial real estate	552,310		546,021		552,184		552,673		597,840		Commercial real estate	576,458		552,310		546,021		552,184		552,673
Paycheck protection program	Paycheck protection program	52,867		69,817		192,474		242,880		468,002		Paycheck protection program	13,329		52,867		69,817		192,474		242,880
Loans to individuals	Loans to individuals	1,977,886		2,024,404		2,014,099		2,063,419		2,043,705		Loans to individuals	1,982,247		1,977,886		2,024,404		2,014,099		2,063,419
Total Oklahoma	Total Oklahoma	5,466,726		5,273,256		5,349,644		5,699,532		6,085,024		Total Oklahoma	5,697,798		5,466,726		5,273,256		5,349,644		5,699,532

Colorado:	Colorado:											Colorado:
Commercial	Commercial	1,977,773		1,936,149		1,874,613		1,904,182		1,910,826		Commercial	2,074,455		1,977,773		1,936,149		1,874,613		1,904,182
Commercial real estate	Commercial real estate	480,740		470,937		526,653		656,521		777,786		Commercial real estate	473,231		480,740		470,937		526,653		656,521
Paycheck protection program	Paycheck protection program	28,584		82,781		140,470		299,712		436,540		Paycheck protection program	8,233		28,584		82,781		140,470		299,712
Loans to individuals	Loans to individuals	236,125		256,533		249,298		262,796		264,759		Loans to individuals	234,105		236,125		256,533		249,298		262,796
Total Colorado	Total Colorado	2,723,222		2,746,400		2,791,034		3,123,211		3,389,911		Total Colorado	2,790,024		2,723,222		2,746,400		2,791,034		3,123,211

Arizona:	Arizona:											Arizona:
Commercial	Commercial	1,074,551		1,130,798		1,194,801		1,239,270		1,207,089		Commercial	1,080,228		1,074,551		1,130,798		1,194,801		1,239,270
Commercial real estate	Commercial real estate	719,970		674,309		734,174		705,497		667,766		Commercial real estate	766,767		719,970		674,309		734,174		705,497
Paycheck protection program	Paycheck protection program	11,644		21,594		42,815		104,946		208,481		Paycheck protection program	5,173		11,644		21,594		42,815		104,946
Loans to individuals	Loans to individuals	190,746		186,528		182,506		178,481		179,031		Loans to individuals	212,870		190,746		186,528		182,506		178,481
Total Arizona	Total Arizona	1,996,911		2,013,229		2,154,296		2,228,194		2,262,367		Total Arizona	2,065,038		1,996,911		2,013,229		2,154,296		2,228,194

Kansas/Missouri:	Kansas/Missouri:											Kansas/Missouri:
Commercial	Commercial	334,371		338,697		336,414		388,291		421,974		Commercial	338,337		334,371		338,697		336,414		388,291
Commercial real estate	Commercial real estate	436,740		382,761		408,001		406,055		395,590		Commercial real estate	458,157		436,740		382,761		408,001		406,055
Paycheck protection program	Paycheck protection program	2,595		4,718		6,920		41,954		60,741		Paycheck protection program	573		2,595		4,718		6,920		41,954
Loans to individuals	Loans to individuals	121,247		110,889		100,920		103,092		104,954		Loans to individuals	125,584		121,247		110,889		100,920		103,092
Total Kansas/Missouri	Total Kansas/Missouri	894,953		837,065		852,255		939,392		983,259		Total Kansas/Missouri	922,651		894,953		837,065		852,255		939,392

New Mexico:	New Mexico:											New Mexico:
Commercial	Commercial	262,533		306,964		287,695		304,804		307,395		Commercial	252,033		262,533		306,964		287,695		304,804
Commercial real estate	Commercial real estate	504,632		442,128		437,302		437,996		448,298		Commercial real estate	431,606		504,632		442,128		437,302		437,996
Paycheck protection program	Paycheck protection program	9,713		13,510		31,444		86,716		124,059		Paycheck protection program	1,792		9,713		13,510		31,444		86,716
Loans to individuals	Loans to individuals	63,299		63,930		66,651		68,177		70,491		Loans to individuals	67,026		63,299		63,930		66,651		68,177
Total New Mexico	Total New Mexico	840,177		826,532		823,092		897,693		950,243		Total New Mexico	752,457		840,177		826,532		823,092		897,693

Arkansas:	Arkansas:											Arkansas:
Commercial	Commercial	95,415		92,143		75,168		104,899		86,678		Commercial	76,222		95,415		92,143		75,168		104,899
Commercial real estate	Commercial real estate	61,459		61,730		74,707		84,499		104,353		Commercial real estate	60,477		61,459		61,730		74,707		84,499
Paycheck protection program	Paycheck protection program	720		2,267		6,306		2,442		12,828		Paycheck protection program	—		720		2,267		6,306		2,442
Loans to individuals	Loans to individuals	6,296		6,283		5,257		13,383		13,032		Loans to individuals	6,475		6,296		6,283		5,257		13,383
Total Arkansas	Total Arkansas	163,890		162,423		161,438		205,223		216,891		Total Arkansas	143,174		163,890		162,423		161,438		205,223

Total BOK Financial loans	Total BOK Financial loans	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449	$	22,533,847	Total BOK Financial loans	$	21,291,148	$	20,674,429	$	20,205,680	$	20,347,936	$	21,416,449

- 24 -

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 Veterans 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)


		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Loan commitments	Loan commitments	$	12,490,832	$	12,471,482	$	12,044,695	$	11,518,158	$	11,151,650	Loan commitments	$	13,470,286	$	12,490,832	$	12,471,482	$	12,044,695	$	11,518,158
Standby letters of credit	Standby letters of credit	654,185		699,743		638,067		671,878		713,834		Standby letters of credit	700,929		654,185		699,743		638,067		671,878
Unpaid principal balance of residential mortgage loans sold with recourse	Unpaid principal balance of residential mortgage loans sold with recourse	51,459		54,619		57,988		63,545		68,393		Unpaid principal balance of residential mortgage loans sold with recourse	48,775		51,459		54,226		57,988		62,080
Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veterans Affairs	Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veterans Affairs	1,062,197		1,095,877		1,150,124		1,225,100		1,326,300		Unpaid principal balance of residential mortgage loans transferred into mortgage-backed securities guaranteed by U.S. Dept. of Veterans Affairs	1,038,317		1,062,197		1,095,877		1,150,124		1,225,100

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.

- 25 -

Derivative contracts are carried at fair value. At ~~March 31,~~June 30, 2022, the net fair values of derivative contracts, before consideration of cash margin, reported as assets under these programs totaled ~~$2.4~~$2.0 billion compared to ~~$1.1~~$2.4 billion at ~~December~~March 31, ~~2021.~~2022. At ~~March 31,~~June 30, 2022, the net fair value of our derivative contracts included ~~$2.1~~$1.9 billion for energy contracts, ~~$179~~$96 million for interest rate swaps and $70 million for foreign exchange ~~contracts and $63 million for interest rate swaps.~~contracts. The aggregate net fair value of derivative contracts, before consideration of cash margin, held under these programs reported as liabilities totaled $2.0 billion at June 30, 2022 and $2.4 billion at March 31, ~~2022 and $1.1 billion at December 31, 2021.~~2022.

At ~~March 31,~~June 30, 2022, total derivative assets were reduced by ~~$38~~$75 million of cash collateral received from counterparties and total derivative liabilities were reduced by ~~$2.2~~$1.9 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 ~~March 31,~~June 30, 2022 follows in Table 15.

Table 15 -- Fair Value of Derivative Contracts

(In thousands)


Customers	$	~~2,206,003~~1,837,191
Banks and other financial institutions	~~112,897~~69,709
Exchanges and clearing organizations	~~27,824~~43,978
Fair value of customer risk management program asset derivative contracts, net	$	~~2,346,724~~1,950,878

At ~~March 31,~~June 30, 2022, our largest derivative exposure was to an energy customer for ~~$107~~$94 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 ~~$86.03~~$91.47 per barrel of oil would decrease the fair value of derivative assets by ~~$529~~$510 million, with lending customers comprising the bulk of the assets. An increase in prices equivalent to ~~$114.53~~$120.05 per barrel of oil would increase the fair value of derivative assets by ~~$657~~$673 million as asset values rise faster than margin paid. Liquidity requirements of this program may also be affected by our credit rating. At ~~March 31,~~June 30, 2022, 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 ~~March 31,~~June 30, 2022, changes in interest rates would not materially impact regulatory capital or liquidity needed to support this portion of our customer derivative program.

- 26 -

Summary of Credit Loss Experience

Table 16 -- Summary of Credit Loss Experience

(In thousands)


		Three Months Ended											Three Months Ended
		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Allowance for loan losses:	Allowance for loan losses:											Allowance for loan losses:
Beginning balance	Beginning balance	$	256,421	$	276,680	311,890		352,402		388,640		Beginning balance	$	246,473	$	256,421	276,680		311,890		352,402
Loans charged off	Loans charged off	(7,805)		(6,558)		(9,584)		(18,304)		(16,905)		Loans charged off	(1,368)		(7,805)		(6,558)		(9,584)		(18,304)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	1,824		7,272		1,769		2,856		2,437		Recoveries of loans previously charged off	2,167		1,824		7,272		1,769		2,856
Net loans recovered (charged off)	Net loans recovered (charged off)	(5,981)		714		(7,815)		(15,448)		(14,468)		Net loans recovered (charged off)	799		(5,981)		714		(7,815)		(15,448)
Provision for credit losses	Provision for credit losses	(3,967)		(20,973)		(27,395)		(25,064)		(21,770)		Provision for credit losses	(6,158)		(3,967)		(20,973)		(27,395)		(25,064)
Ending balance	Ending balance	$	246,473	$	256,421	$	276,680	$	311,890	$	352,402	Ending balance	$	241,114	$	246,473	$	256,421	$	276,680	$	311,890

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	$	32,977	$	29,239	24,287		32,877		36,921		Beginning balance	$	36,245	$	32,977	29,239		24,287		32,877
Provision for credit losses	Provision for credit losses	3,268		3,738		4,952		(8,590)		(4,044)		Provision for credit losses	6,005		3,268		3,738		4,952		(8,590)
Ending balance	Ending balance	$	36,245	$	32,977	$	29,239	$	24,287	$	32,877	Ending balance	$	42,250	$	36,245	$	32,977	$	29,239	$	24,287

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	$	3,382	$	3,264	3,828		5,135		4,282		Beginning balance	$	3,997	$	3,382	3,264		3,828		5,135
Loans charged off	Loans charged off	(6)		(32)		(30)		(85)		(32)		Loans charged off	(63)		(6)		(32)		(30)		(85)
Provision for credit losses	Provision for credit losses	621		150		(534)		(1,222)		885		Provision for credit losses	69		621		150		(534)		(1,222)
Ending balance	Ending balance	$	3,997	$	3,382	$	3,264	$	3,828	$	5,135	Ending balance	$	4,003	$	3,997	$	3,382	$	3,264	$	3,828

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	$	555	$	470	$	493	$	617	$	688	Beginning balance	$	633	$	555	$	470	$	493	$	617
Provision for credit losses	Provision for credit losses	78		85		(23)		(124)		(71)		Provision for credit losses	84		78		85		(23)		(124)
Ending balance	Ending balance	$	633	$	555	$	470	$	493	$	617	Ending balance	$	717	$	633	$	555	$	470	$	493

Total provision for credit losses	Total provision for credit losses	$	—	$	(17,000)	$	(23,000)	$	(35,000)	$	(25,000)	Total provision for credit losses	$	—	$	—	$	(17,000)	$	(23,000)	$	(35,000)

- 27 -


		Three Months Ended																Three Months Ended
		Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021				June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
Average loans by portfolio segment :	Average loans by portfolio segment :																Average loans by portfolio segment :
Commercial	Commercial	$	12,677,706		$	12,401,935		$	12,231,230		$	12,402,925		$	12,908,461		Commercial	$	13,382,176		$	12,677,706		$	12,401,935		$	12,231,230		$	12,402,925
Commercial real estate	Commercial real estate	4,059,148			3,838,336			4,218,190			4,395,848			4,547,945			Commercial real estate	4,061,129			4,059,148			3,838,336			4,218,190			4,395,848
Paycheck protection program	Paycheck protection program	210,110			404,261			792,728			1,668,047			1,741,534			Paycheck protection program	90,312			210,110			404,261			792,728			1,668,047
Loans to individuals	Loans to individuals	3,516,698			3,598,121			3,606,460			3,700,269			3,559,067			Loans to individuals	3,524,097			3,516,698			3,598,121			3,606,460			3,700,269
Net charge-offs (annualized) to average loans	Net charge-offs (annualized) to average loans	0.12		%	(0.01)		%	0.15		%	0.28		%	0.25		%	Net charge-offs (annualized) to average loans	(0.02)		%	0.12		%	(0.01)		%	0.15		%	0.28		%
Net charge-offs (annualized) to average loans excluding PPP loans1	Net charge-offs (annualized) to average loans excluding PPP loans1	0.12		%	(0.01)		%	0.16		%	0.30		%	0.28		%	Net charge-offs (annualized) to average loans excluding PPP loans1	(0.02)		%	0.12		%	(0.01)		%	0.16		%	0.30		%
Net charge-offs (annualized) to average loans by portfolio segment:	Net charge-offs (annualized) to average loans by portfolio segment:																Net charge-offs (annualized) to average loans by portfolio segment:
Commercial	Commercial	0.17		%	(0.03)		%	0.20		%	0.47		%	0.42		%	Commercial	(0.05)		%	0.17		%	(0.03)		%	0.20		%	0.47		%
Commercial real estate	Commercial real estate	—		%	(0.06)		%	0.11		%	0.06		%	0.02		%	Commercial real estate	0.01		%	—		%	(0.06)		%	0.11		%	0.06		%
Paycheck protection program	Paycheck protection program	—		%	—		%	—		%	—		%	—		%	Paycheck protection program	—		%	—		%	—		%	—		%	—		%
Loans to individuals	Loans to individuals	0.05		%	0.08		%	0.05		%	0.02		%	0.06		%	Loans to individuals	0.08		%	0.05		%	0.08		%	0.05		%	0.02		%
Recoveries to gross charge-offs	Recoveries to gross charge-offs	23.37		%	110.89		%	18.46		%	15.60		%	14.42		%	Recoveries to gross charge-offs	158.41		%	23.37		%	110.89		%	18.46		%	15.60		%
Provision for loan losses (annualized) to average loans	Provision for loan losses (annualized) to average loans	(0.08)		%	(0.41)		%	(0.53)		%	(0.45)		%	(0.38)		%	Provision for loan losses (annualized) to average loans	(0.12)		%	(0.08)		%	(0.41)		%	(0.53)		%	(0.45)		%
Allowance for loan losses to loans outstanding at period-end	Allowance for loan losses to loans outstanding at period-end	1.19		%	1.27		%	1.36		%	1.46		%	1.56		%	Allowance for loan losses to loans outstanding at period-end	1.13		%	1.19		%	1.27		%	1.36		%	1.46		%
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	1.20		%	1.29		%	1.40		%	1.54		%	1.70		%	Allowance for loan losses to loans outstanding at period-end excluding PPP loans1	1.13		%	1.20		%	1.29		%	1.40		%	1.54		%
Accrual for unfunded loan commitments to loan commitments	Accrual for unfunded loan commitments to loan commitments	0.29		%	0.26		%	0.24		%	0.21		%	0.29		%	Accrual for unfunded loan commitments to loan commitments	0.31		%	0.29		%	0.26		%	0.24		%	0.21		%
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	1.37		%	1.43		%	1.50		%	1.57		%	1.71		%	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to loans outstanding at period-end	1.33		%	1.37		%	1.43		%	1.50		%	1.57		%
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	1.38		%	1.45		%	1.54		%	1.66		%	1.86		%	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	1.33		%	1.38		%	1.45		%	1.54		%	1.66		%

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

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.

No provision for credit losses was necessary for the ~~first~~second quarter of 2022. ~~Changes~~An increase in allowance related to our lending activities from the strong loan growth during the quarter and changes in our reasonable and supportable forecasts of macroeconomic variables resulted in a $7.3 million decrease in the allowance for credit losses related to lending activities. Continued strength in commodity prices was partially offset by changes in our economic outlook. Changes in loan portfolio characteristics,forecast, primarily related to ~~growth in loan balances resulted in a $6.6 million increase in~~ the ~~allowance for credit losses related~~economic outlook from the Federal Reserve's actions to ~~lending activities. Continued improvements in credit quality metrics~~control inflation, were offset by ~~net charge-offs and changes in specific impairment and payment profile characteristics.~~the impact of a sustained trend of improving credit quality metrics.

- 28 -

The probability ~~weighting~~weightings of our base case reasonable and supportable forecast decreased and our downside reasonable and supportable forecast increased in the second quarter of 2022 compared to ~~60 percent in~~ the first quarter of 2022 ~~compared to 65 percent in the fourth quarter of 2021~~ as the level of uncertainty in the current economic outlook increased. In addition, the key economic factors were generally less favorable to economic growth across all scenarios. These changes resulted in a $15.8 million increase in the provision for credit losses. This increase was largely offset by a decrease in expected losses on commercial services and wholesale / retail loans.

A summary of macroeconomic variables considered in developing our estimate of expected credit losses at ~~March 31,~~June 30, 2022 follows:

Base

Downside

Upside

Base

Downside

Upside

Scenario probability weighting

60%

30%

10%

Scenario probability weighting

55%

35%

10%

Economic outlook

The Russia-Ukraine conflict remains isolated and conditions improve by mid-year 2022.

The federal funds rate is increased at each Federal Reserve Open Market ("FOMC") meeting through March 2023, which results in a target range of 2.75 percent to 3.00 percent. Additionally, the Federal Reserve begins balance sheet reduction by mid-year 2022.

Labor force participants continue to re-enter the job market to meet the record number of job openings. The increase in employment helps maintain household income above its pre-pandemic trend. This, coupled with the drawdown in savings, supports consumer spending and produces GDP growth consistent with pre-pandemic levels.

The Russia-Ukraine conflict persists through 2022 but remains isolated.

The Federal Reserve is forced to adopt a more aggressive monetary policy to combat the inflationary environment. This results in a target range of 4.00 percent to 4.25 percent by March 2023. Additionally, the Federal Reserve begins balance sheet reduction by mid-year 2022.

Additional surges in commodity prices exacerbated by supply chain dislocations create higher levels of inflation that do not peak until the fourth quarter of 2022. These factors push the United States into a recession, with contraction in economic activity and a sharp increase in the unemployment rate.

The Russia-Ukraine conflict remains isolated and conditions improve early second quarter 2022.

The federal funds rate is increased at each FOMC meeting through March 2023, which results in a target range of 2.25 percent to 2.50 percent. Additionally, the Federal Reserve begins balance sheet reduction by mid-year 2022.

Labor force participants continue to re-enter the job market to meet the record number of job openings. The increase in employment helps maintain household income above its pre-pandemic trend. This coupled with the drawdown in savings, supports consumer spending and produces above trend GDP growth.

Economic outlook

The Russia-Ukraine conflict remains isolated and conditions improve by the fourth quarter of 2022.

The federal funds rate is increased at Federal Reserve Open Market ("FOMC") meetings through June 2023, which results in a target range of 3.50 percent to 3.75 percent.

Labor force participants continue to re-enter the job market to meet the record number of job openings. Inflation pressures cause modest declines in real household income compared to pre-pandemic levels, but is offset by a drawdown in savings. This results in below-trend GDP growth.

The Russia-Ukraine conflict persists through second quarter of 2023, but remains isolated.

Additional surges in commodity prices exacerbated by supply chain dislocations create higher levels of inflation forcing the Federal Reserve to adopt a more aggressive monetary policy to combat the inflationary environment. This results in a target range of 4.50 percent to 4.75 percent by June 2023. This pushes the United States into a recession, with a contraction in economic activity and a sharp increase in the unemployment rate.

The Russia-Ukraine conflict remains isolated and conditions improve in the third quarter 2022.

The federal funds rate is increased at FOMC meetings through June 2023, which results in a target range of 3.00 percent to 3.25 percent.

Labor force participants continue to re-enter the job market to meet the record number of job openings. The increase in employment helps maintain household income above its pre-pandemic trend. This coupled with the drawdown in savings, supports consumer spending and produces GDP growth consistent with pre-pandemic levels.

Macro-economic factors

–GDP is forecasted to grow by 2.2 percent over the next 12 months.

–Civilian unemployment rate of 3.9 percent in the first quarter of 2022 improves to 3.8 percent by the first quarter of 2023.

–WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of March 2022 and are expected to average $94.98 per barrel over the next 12 months.

–GDP is forecasted to contract 1.3 percent over the next twelve months.

–Civilian unemployment rate of 4.4 percent in the second quarter of 2022 increases to 6.9 percent in the first quarter of 2023.

–WTI oil prices are projected to average $109.67 over the next 12 months, with a peak of $131.46 in the third quarter of 2022 and falling 33% over the following two quarters.

–GDP is forecasted to grow by 3.3 percent over the next 12 months.

–Civilian unemployment rate of 3.7 percent in the second quarter of 2022 improves to 3.3 percent by the first quarter of 2023.

–WTI oil prices are projected to average $85.89 per barrel over the next 12 months.

Macro-economic factors

–GDP is forecasted to grow by 1.4 percent over the next 12 months.

–Civilian unemployment rate of 3.7 percent in the third quarter of 2022 increases to 4.0 percent by the second quarter of 2023.

–WTI oil prices are projected to generally follow the NYMEX forward curve that existed at the end of June 2022 and are expected to average $98.15 per barrel over the next 12 months.

–GDP is forecasted to contract 1.8 percent over the next twelve months.

–Civilian unemployment rate of 4.2 percent in the third quarter of 2022 increases to 6.9 percent in the second quarter of 2023.

–WTI oil prices are projected to average $105.36 over the next 12 months, with a peak of $130.37 in the fourth quarter of 2022 and falling 39% over the following two quarters.

–GDP is forecasted to grow by 2.4 percent over the next 12 months.

–Civilian unemployment rate of 3.5 percent in the third quarter of 2022 increases to 3.6 percent by the second quarter of 2023.

–WTI oil prices are projected to average $90.27 per barrel over the next 12 months.

The sensitivity to management's economic scenario weighting may be quantified by comparing the results of weighting each

economic scenario at 100%. For example, compared to a 100% Base Case scenario, a 100% Downside case would result in an

additional $118 million in quantitative reserve at June 30, 2022. Such sensitivity calculations do not necessarily reflect the nature and extent of future changes in the related allowance.

- 29 -

Growth in loan balances ~~results~~resulted in a ~~$7.0~~$5.3 million increase in ~~allowance. Net charge-offs and~~allowance, offset by a $1.9 million decrease related to improved risk grading, a $3.0 million decrease related to changes in ~~specific impairments attributed to certain credits required a $2.9 million provision~~payment characteristics of the portfolio and net recoveries of $799 thousand during the ~~first~~second quarter of 2022. Improved risk grading during the quarter ~~resulted in a $6.1 million decrease in the allowance for lending activities,~~was primarily related to energy, services, general business and commercial real estate ~~and commercial wholesale/retail sector loans.~~loans, partially offset by slightly worse risk grades in the healthcare 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 ~~$389~~$323 million at ~~March 31,~~June 30, 2022, a ~~$67~~$66 million decrease compared to ~~December~~March 31, ~~2021.~~2022. Non-pass graded loans were primarily composed of ~~$101~~$81 million or 32 percent of services loans, $58 million or 2 percent of energy loans, ~~$77~~$58 million or 2 percent of healthcare loans, ~~$74~~$50 million or 21 percent of ~~services~~ loans ~~$52~~to individuals, $43 million or 1 percent of general business loans and $32 million or 1 percent of commercial real estate ~~loans and $36 million or 1 percent of general business~~ loans.

~~- 29 -~~

~~The~~At June 30, 2022, the allowance for loan losses totaled $241 million or 1.13 percent of outstanding loans. Excluding residential mortgage loans guaranteed by U.S. government agencies, the allowance for loan losses was 251 percent of nonaccruing loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $283 million or 1.33 percent of outstanding loans and 295 percent of nonaccruing loans at June 30, 2022.

No provision for credit losses was necessary for the first quarter of 2022. At March 31, 2022, the allowance for loan losses was $246 million or 1.19 percent of outstanding ~~loans and 230 percent of nonaccruing loans at March 31, 2022, excluding~~loans. Excluding residential mortgage loans guaranteed by U.S. government ~~agencies.~~agencies, the allowance for loan losses was 230 percent of nonaccruing loans. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $283 million or 1.37 percent of outstanding loans and 264 percent of nonaccruing ~~loans at March 31, 2022.~~

The Company recorded a $17.0 million negative provision for credit losses in the fourth quarter of 2021. The allowance for loan losses was $256 million or 1.27 percent of outstanding loans and 213 percent of nonaccruing loans, excluding loans guaranteed by U.S. government agencies at December 31, 2021. The combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments was $289 million or 1.43 percent of outstanding loans and 241 percent of nonaccruing loans.

Net Loans Charged Off

Net ~~charge-offs~~recoveries of commercial loans were ~~$5.5~~$1.6 million in the ~~first~~second quarter of ~~2022, primarily related to two general business borrowers and a single energy services borrower.~~2022. Net commercial real estate loan charge-offs were ~~$47~~$62 thousand and net charge-offs of loans to individuals were ~~$444~~$721 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.

- 30 -

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)


		Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021				June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
Nonaccruing loans:	Nonaccruing loans:																Nonaccruing loans:
Commercial:	Commercial:																Commercial:
Energy	Energy	$	24,976		$	31,091		$	45,500		$	70,341		$	101,800		Energy	$	20,924		$	24,976		$	31,091		$	45,500		$	70,341
Services	Services	16,535			17,170			25,714			29,913			28,033			Services	15,259			16,535			17,170			25,714			29,913
Healthcare	Healthcare	15,076			15,762			509			527			3,187			Healthcare	14,886			15,076			15,762			509			527
General business	General business	3,750			10,081			8,951			11,823			14,053			General business	3,539			3,750			10,081			8,951			11,823
Total commercial	Total commercial	60,337			74,104			80,674			112,604			147,073			Total commercial	54,608			60,337			74,104			80,674			112,604

Commercial real estate	Commercial real estate	15,989			14,262			21,223			26,123			27,243			Commercial real estate	10,939			15,989			14,262			21,223			26,123

Loans to individuals:	Loans to individuals:																Loans to individuals:
Residential mortgage	Residential mortgage	30,757			31,574			30,674			31,473			32,884			Residential mortgage	30,460			30,757			31,574			30,674			31,473
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	16,992			13,861			9,188			9,207			8,564			Residential mortgage guaranteed by U.S. government agencies	18,000			16,992			13,861			9,188			9,207
Personal	Personal	171			258			188			229			255			Personal	132			171			258			188			229
Total loans to individuals	Total loans to individuals	47,920			45,693			40,050			40,909			41,703			Total loans to individuals	48,592			47,920			45,693			40,050			40,909
Total nonaccruing loans	Total nonaccruing loans	124,246			134,059			141,947			179,636			216,019			Total nonaccruing loans	114,139			124,246			134,059			141,947			179,636
Accruing renegotiated loans guaranteed by U.S. government agencies	Accruing renegotiated loans guaranteed by U.S. government agencies	204,121			210,618			178,554			171,324			154,591			Accruing renegotiated loans guaranteed by U.S. government agencies	196,420			204,121			210,618			178,554			171,324
Real estate and other repossessed assets	Real estate and other repossessed assets	24,492			24,589			28,770			57,337			70,911			Real estate and other repossessed assets	22,221			24,492			24,589			28,770			57,337
Total nonperforming assets	Total nonperforming assets	$	352,859		$	369,266		$	349,271		$	408,297		$	441,521		Total nonperforming assets	$	332,780		$	352,859		$	369,266		$	349,271		$	408,297
Total nonperforming assets excluding those guaranteed by U.S. government agencies	Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	131,746		$	144,787		$	161,529		$	227,766		$	278,366		Total nonperforming assets excluding those guaranteed by U.S. government agencies	$	118,360		$	131,746		$	144,787		$	161,529		$	227,766

Allowance for loan losses to nonaccruing loans1	Allowance for loan losses to nonaccruing loans1	229.80		%	213.33		%	208.41		%	183.00		%	169.87		%	Allowance for loan losses to nonaccruing loans1	250.80		%	229.80		%	213.33		%	208.41		%	183.00		%
Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1	263.60		%	240.77		%	230.43		%	197.25		%	185.72		%	Combined allowance for loan losses and accrual for off-balance sheet credit risk from unfunded loan commitments to nonaccruing loans1	294.74		%	263.60		%	240.77		%	230.43		%	197.25		%
Nonperforming assets to outstanding loans and repossessed assets	Nonperforming assets to outstanding loans and repossessed assets	1.70		%	1.83		%	1.71		%	1.90		%	1.95		%	Nonperforming assets to outstanding loans and repossessed assets	1.56		%	1.70		%	1.83		%	1.71		%	1.90		%
Nonperforming assets to outstanding loans and repossessed assets1,2	Nonperforming assets to outstanding loans and repossessed assets1,2	0.65		%	0.74		%	0.83		%	1.14		%	1.37		%	Nonperforming assets to outstanding loans and repossessed assets1,2	0.56		%	0.65		%	0.74		%	0.83		%	1.14		%
Nonaccruing loans to outstanding loans	Nonaccruing loans to outstanding loans	0.60		%	0.66		%	0.70		%	0.84		%	0.96		%	Nonaccruing loans to outstanding loans	0.54		%	0.60		%	0.66		%	0.70		%	0.84		%
Nonaccruing commercial loans to outstanding commercial loans	Nonaccruing commercial loans to outstanding commercial loans	0.47		%	0.59		%	0.66		%	0.90		%	1.16		%	Nonaccruing commercial loans to outstanding commercial loans	0.40		%	0.47		%	0.59		%	0.66		%	0.90		%
Nonaccruing commercial real estate loans to outstanding commercial real estate loans	Nonaccruing commercial real estate loans to outstanding commercial real estate loans	0.39		%	0.37		%	0.52		%	0.62		%	0.60		%	Nonaccruing commercial real estate loans to outstanding commercial real estate loans	0.27		%	0.39		%	0.37		%	0.52		%	0.62		%
Nonaccruing loans to individuals to outstanding loans to individuals1	Nonaccruing loans to individuals to outstanding loans to individuals1	0.96		%	0.98		%	0.98		%	1.00		%	1.07		%	Nonaccruing loans to individuals to outstanding loans to individuals1	0.94		%	0.96		%	0.98		%	0.98		%	1.00		%

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

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

- 31 -

Excluding assets guaranteed by U.S. government agencies, nonperforming assets decreased $13 million from ~~December~~March 31, ~~2021,~~2022, primarily due to a ~~$6.3~~$5.1 million decrease in nonaccruing ~~general business~~commercial real estate loans and a ~~$6.1~~$4.1 million decrease in nonaccruing energy loans. Newly identified nonaccruing loans totaled ~~$12~~$4.4 million, offset by ~~$14~~$8.4 million of payments, $4.0 million in foreclosures and ~~$7.8~~$1.4 million of charge-offs. The Company generally retains nonperforming assets to maximize potential recovery, which may cause future nonperforming assets to decrease more slowly.

- 32 -

A rollforward of nonperforming assets for the three and six months ended ~~March 31,~~June 30, 2022 follows in Table 18.

Table 18 -- Rollforward of Nonperforming Assets

(In thousands)


		Three Months Ended																	Three Months Ended
		March 31, 2022																	June 30, 2022
		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, December 31, 2021		$	74,104	$	14,262		$	45,693	$	134,059	$	210,618		$	24,589	$	369,266
Balance, March 31, 2022																		Balance, March 31, 2022	$	60,337	$	15,989	$	47,920	$	124,246	$	204,121	$	24,492	$	352,859
Additions	Additions	1,393		4,261			6,270		11,924		16,990			—		28,914		Additions	68		196		4,140		4,404		10,744		—		15,148

Payments	Payments	(9,079)		(290)			(4,407)		(13,776)		(2,233)			—		(16,009)		Payments	(5,791)		(281)		(2,370)		(8,442)		(1,654)		—		(10,096)
Charge-offs	Charge-offs	(6,081)		(191)			(1,533)		(7,805)		—			—		(7,805)		Charge-offs	(6)		(78)		(1,284)		(1,368)		—		—		(1,368)
Net gains (losses) and write-downs	Net gains (losses) and write-downs	—		—			—		—		—			1,873		1,873		Net gains (losses) and write-downs	—		—		—		—		—		(4,014)		(4,014)
Foreclosure of nonperforming loans	Foreclosure of nonperforming loans	—		—			(64)		(64)		—			64		—		Foreclosure of nonperforming loans	—		(3,956)		(60)		(4,016)		—		4,016		—
Foreclosure of loans guaranteed by U.S. government agencies	Foreclosure of loans guaranteed by U.S. government agencies	—		—			(891)		(891)		(601)			—		(1,492)		Foreclosure of loans guaranteed by U.S. government agencies	—		—		(1,097)		(1,097)		(321)		—		(1,418)
Proceeds from sales	Proceeds from sales	—		—			—		—		(17,806)			(2,034)		(19,840)		Proceeds from sales	—		—		—		—		(15,452)		(2,273)		(17,725)

Net transfers to nonaccruing loans	Net transfers to nonaccruing loans	—		—			3,238		3,238		(3,238)			—		—		Net transfers to nonaccruing loans	—		—		1,377		1,377		(1,377)		—		—
Return to accrual status	Return to accrual status	—		(2,053)			(386)		(2,439)		—			—		(2,439)		Return to accrual status	—		(931)		(34)		(965)		—		—		(965)
Other, net	Other, net	—		—			—		—		391			—		391		Other, net	—		—		—		—		359		—		359
Balance, March 31, 2022		$	60,337	$	15,989		$	47,920	$	124,246	$	204,121		$	24,492	$	352,859
Balance, June 30, 2022																		Balance, June 30, 2022	$	54,608	$	10,939	$	48,592	$	114,139	$	196,420	$	22,221	$	332,780

						Six Months Ended
						June 30, 2022
													Nonaccruing Loans
																			Commercial		Commercial Real Estate		Loan to Individuals		Total		Renegotiated Loans		Real Estate and Other Repossessed Assets		Total Nonperforming Assets
Balance, Dec. 31, 2021																		Balance, Dec. 31, 2021	$	74,104	$	14,262	$	45,693	$	134,059	$	210,618	$	24,589	$	369,266
Additions																		Additions	1,461		4,457		10,410		16,328		27,734		—		44,062

Payments																		Payments	(14,870)		(571)		(6,777)		(22,218)		(3,887)		—		(26,105)
Charge-offs																		Charge-offs	(6,087)		(269)		(2,817)		(9,173)		—		—		(9,173)
Net gains (losses) and write-downs																		Net gains (losses) and write-downs	—		—		—		—		—		(2,141)		(2,141)
Foreclosure of nonperforming loans																		Foreclosure of nonperforming loans	—		(3,956)		(124)		(4,080)		—		4,080		—
Foreclosure of loans guaranteed by U.S. government agencies																		Foreclosure of loans guaranteed by U.S. government agencies	—		—		(1,988)		(1,988)		(922)		—		(2,910)
Proceeds from sales																		Proceeds from sales	—		—		—		—		(33,258)		(4,307)		(37,565)
Net transfers to nonaccruing loans																		Net transfers to nonaccruing loans	—		—		4,615		4,615		(4,615)		—		—
Return to accrual status																		Return to accrual status	—		(2,984)		(420)		(3,404)		—		—		(3,404)
Other, net																		Other, net	—		—		—		—		750		—		750
Balance, June 30, 2022																		Balance, June 30, 2022	$	54,608	$	10,939	$	48,592	$	114,139	$	196,420	$	22,221	$	332,780

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.

- 33 -

Real Estate and Other Repossessed Assets

Real estate and other repossessed assets totaled ~~$24~~$22 million at ~~March 31,~~June 30, 2022, composed primarily of $15 million of developed commercial real ~~estate and $7.1 million of oil and gas properties.~~estate. Real estate and other repossessed assets ~~was largely unchanged~~decreased $2.3 million compared to ~~December~~March 31, ~~2021.~~2022.

- 3234 -

Liquidity and Capital

Based on the average balances for the ~~first~~second quarter of 2022, approximately 8082 percent of our funding was provided by deposit accounts, 65 percent from borrowed funds, less than 1 percent from long-term subordinated debt and 10 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 ~~first~~second quarter of 2022 totaled ~~$40.4~~$38.6 billion, a ~~$560 million increase over~~$1.8 billion decrease compared to the ~~fourth~~first quarter of ~~2021. Continued deposit growth was primarily due~~2022. Deposit balances are beginning to reduce as customers ~~maintaining~~start to deploy cash resources into higher ~~balances in~~yielding alternatives and increase spending levels following the ~~current economic environment, supplemented by inflows from government stimulus payments.~~height of the pandemic. Interest-bearing transaction account balances ~~increased $437 million.~~decreased $1.7 billion. Demand deposits grew by ~~$243~~$140 million and savings account balances were up ~~$38~~$34 million. Certificate of deposit balances decreased ~~$159~~$216 million.

Table 19 - Average Deposits by Line of Business

(In thousands)


		Three Months Ended											Three Months Ended
		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Commercial Banking	Commercial Banking	$	19,595,260	$	19,537,285	$	17,881,673	$	17,049,772	$	16,130,168	Commercial Banking	$	18,933,766	$	19,595,260	$	19,537,285	$	17,881,673	$	17,049,772
Consumer Banking	Consumer Banking	8,746,622		8,682,437		8,516,942		8,469,043		8,082,443		Consumer Banking	8,876,469		8,746,622		8,682,437		8,516,942		8,469,043
Wealth Management	Wealth Management	9,619,323		9,194,019		9,120,446		9,695,319		9,706,295		Wealth Management	8,482,785		9,619,323		9,194,019		9,120,446		9,695,319
Subtotal	Subtotal	37,961,205		37,413,741		35,519,061		35,214,134		33,918,906		Subtotal	36,293,020		37,961,205		37,413,741		35,519,061		35,214,134
Funds Management and other	Funds Management and other	2,401,002		2,388,347		2,315,325		2,276,093		2,603,210		Funds Management and other	2,301,400		2,401,002		2,388,347		2,315,325		2,276,093
Total	Total	$	40,362,207	$	39,802,088	$	37,834,386	$	37,490,227	$	36,522,116	Total	$	38,594,420	$	40,362,207	$	39,802,088	$	37,834,386	$	37,490,227

Average Commercial Banking deposit balances ~~increased $58~~decreased $661 million ~~over~~compared to the ~~fourth~~first quarter of ~~2021.~~2022. Interest-bearing transaction account balances ~~increased $40~~decreased $731 million and time deposits decreased $223 million. Demand deposit balances were up ~~$32~~$292 million. Commercial customers continue to retain large cash reserves 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~~have decreased as ~~the economic outlook improves and if~~ short-term rates move higher, enhancing their investment alternatives.

Average Consumer Banking deposit balances increased ~~$64~~$130 million over the prior ~~quarter. A $72~~quarter, largely due to annual income tax deadlines. Demand deposit balances increased $68 million, ~~increase in~~ interest-bearing transaction deposit balances ~~and a $33~~increased $55 million ~~increase in~~and savings account balances ~~were partially offset by a~~increased $35 ~~million decrease in time deposit balances. Demand deposit balances were largely unchanged compared to prior quarter.~~million.

Average Wealth Management deposits ~~increased $425 million~~decreased $1.1 billion compared to the ~~fourth~~first quarter of ~~2021.~~2022. A ~~$295~~$925 million ~~increase~~decrease in ~~interest bearing~~interest-bearing transaction accounts and a ~~$246~~$233 million ~~increase~~decrease in demand deposit balances was partially offset by a ~~$121~~$22 million ~~decrease~~increase in time deposit balances.

Average time deposits for the ~~first~~second quarter of 2022 included ~~$48~~$57 million of brokered deposits, ~~an $845 thousand decrease~~a $9.3 million increase compared to the ~~fourth~~first quarter of ~~2021.~~2022. Average interest-bearing transaction accounts for the ~~first~~second quarter included ~~$2.1~~$2.0 billion of brokered deposits, ~~an $8.0~~a $67 million ~~increase over~~decrease compared to the ~~fourth~~first quarter of ~~2021.~~2022.

- 3335 -

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)


		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Oklahoma:	Oklahoma:											Oklahoma:
Demand	Demand	$	5,205,806	$	5,433,405	$	5,080,162	$	4,985,542	$	4,823,436	Demand	$	5,422,593	$	5,205,806	$	5,433,405	$	5,080,162	$	4,985,542
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	11,410,709		12,689,367		11,692,679		12,065,844		12,828,070		Transaction	10,240,378		11,410,709		12,689,367		11,692,679		12,065,844
Savings	Savings	558,634		521,439		510,906		500,344		487,862		Savings	561,413		558,634		521,439		510,906		500,344
Time	Time	817,744		978,822		1,039,866		1,139,980		1,197,517		Time	678,127		817,744		978,822		1,039,866		1,139,980
Total interest-bearing	Total interest-bearing	12,787,087		14,189,628		13,243,451		13,706,168		14,513,449		Total interest-bearing	11,479,918		12,787,087		14,189,628		13,243,451		13,706,168
Total Oklahoma	Total Oklahoma	17,992,893		19,623,033		18,323,613		18,691,710		19,336,885		Total Oklahoma	16,902,511		17,992,893		19,623,033		18,323,613		18,691,710

Texas:	Texas:											Texas:
Demand	Demand	4,552,001		4,552,983		3,987,503		3,752,790		3,592,969		Demand	4,670,535		4,552,001		4,552,983		3,987,503		3,752,790
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	4,963,118		5,345,461		4,985,465		4,335,113		4,257,234		Transaction	5,344,326		4,963,118		5,345,461		4,985,465		4,335,113
Savings	Savings	182,536		178,458		165,043		160,805		154,406		Savings	183,708		182,536		178,458		165,043		160,805
Time	Time	329,931		337,559		337,389		346,577		368,086		Time	333,038		329,931		337,559		337,389		346,577
Total interest-bearing	Total interest-bearing	5,475,585		5,861,478		5,487,897		4,842,495		4,779,726		Total interest-bearing	5,861,072		5,475,585		5,861,478		5,487,897		4,842,495
Total Texas	Total Texas	10,027,586		10,414,461		9,475,400		8,595,285		8,372,695		Total Texas	10,531,607		10,027,586		10,414,461		9,475,400		8,595,285

Colorado:	Colorado:											Colorado:
Demand	Demand	2,673,352		2,526,855		2,158,596		1,991,343		2,115,354		Demand	2,799,798		2,673,352		2,526,855		2,158,596		1,991,343
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	2,387,304		2,334,371		2,337,354		2,159,819		2,100,135		Transaction	2,277,563		2,387,304		2,334,371		2,337,354		2,159,819
Savings	Savings	81,762		78,636		79,873		73,990		73,446		Savings	82,976		81,762		78,636		79,873		73,990
Time	Time	165,401		174,351		184,002		193,787		204,973		Time	160,795		165,401		174,351		184,002		193,787
Total interest-bearing	Total interest-bearing	2,634,467		2,587,358		2,601,229		2,427,596		2,378,554		Total interest-bearing	2,521,334		2,634,467		2,587,358		2,601,229		2,427,596
Total Colorado	Total Colorado	5,307,819		5,114,213		4,759,825		4,418,939		4,493,908		Total Colorado	5,321,132		5,307,819		5,114,213		4,759,825		4,418,939

New Mexico:	New Mexico:											New Mexico:
Demand	Demand	1,271,264		1,196,057		1,222,895		1,197,412		1,131,713		Demand	1,347,600		1,271,264		1,196,057		1,222,895		1,197,412
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	888,257		858,394		837,630		723,757		736,923		Transaction	845,442		888,257		858,394		837,630		723,757
Savings	Savings	115,457		107,963		107,615		105,837		103,591		Savings	115,660		115,457		107,963		107,615		105,837
Time	Time	156,140		163,871		168,879		174,665		181,863		Time	148,532		156,140		163,871		168,879		174,665
Total interest-bearing	Total interest-bearing	1,159,854		1,130,228		1,114,124		1,004,259		1,022,377		Total interest-bearing	1,109,634		1,159,854		1,130,228		1,114,124		1,004,259
Total New Mexico	Total New Mexico	2,431,118		2,326,285		2,337,019		2,201,671		2,154,090		Total New Mexico	2,457,234		2,431,118		2,326,285		2,337,019		2,201,671

- 3436 -


		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			June 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		June 30, 2021
Arizona:	Arizona:											Arizona:
Demand	Demand	947,775		934,282		1,110,884		943,511		915,439		Demand	901,543		947,775		934,282		1,110,884		943,511
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	810,896		834,491		784,614		820,901		835,795		Transaction	792,269		810,896		834,491		784,614		820,901
Savings	Savings	18,122		16,182		16,468		13,496		13,235		Savings	17,999		18,122		16,182		16,468		13,496
Time	Time	27,259		31,274		30,862		30,012		30,997		Time	28,774		27,259		31,274		30,862		30,012
Total interest-bearing	Total interest-bearing	856,277		881,947		831,944		864,409		880,027		Total interest-bearing	839,042		856,277		881,947		831,944		864,409
Total Arizona	Total Arizona	1,804,052		1,816,229		1,942,828		1,807,920		1,795,466		Total Arizona	1,740,585		1,804,052		1,816,229		1,942,828		1,807,920

Kansas/Missouri:	Kansas/Missouri:											Kansas/Missouri:
Demand	Demand	553,345		658,342		488,595		463,339		478,370		Demand	537,143		553,345		658,342		488,595		463,339
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	1,107,525		1,086,946		965,757		978,160		991,510		Transaction	913,921		1,107,525		1,086,946		965,757		978,160
Savings	Savings	19,589		18,844		17,303		17,539		18,686		Savings	19,943		19,589		18,844		17,303		17,539
Time	Time	11,527		12,255		13,040		13,509		13,898		Time	13,962		11,527		12,255		13,040		13,509
Total interest-bearing	Total interest-bearing	1,138,641		1,118,045		996,100		1,009,208		1,024,094		Total interest-bearing	947,826		1,138,641		1,118,045		996,100		1,009,208
Total Kansas/Missouri	Total Kansas/Missouri	1,691,986		1,776,387		1,484,695		1,472,547		1,502,464		Total Kansas/Missouri	1,484,969		1,691,986		1,776,387		1,484,695		1,472,547

Arkansas:	Arkansas:											Arkansas:
Demand	Demand	38,798		42,499		41,594		46,472		45,889		Demand	41,084		38,798		42,499		41,594		46,472
Interest-bearing:	Interest-bearing:											Interest-bearing:
Transaction	Transaction	122,020		119,543		149,611		195,125		141,207		Transaction	130,300		122,020		119,543		149,611		195,125
Savings	Savings	3,265		3,213		3,289		3,445		3,000		Savings	3,125		3,265		3,213		3,289		3,445
Time	Time	6,414		6,196		6,677		6,819		7,022		Time	6,371		6,414		6,196		6,677		6,819
Total interest-bearing	Total interest-bearing	131,699		128,952		159,577		205,389		151,229		Total interest-bearing	139,796		131,699		128,952		159,577		205,389
Total Arkansas	Total Arkansas	170,497		171,451		201,171		251,861		197,118		Total Arkansas	180,880		170,497		171,451		201,171		251,861
Total BOK Financial deposits	Total BOK Financial deposits	$	39,425,951	$	41,242,059	$	38,524,551	$	37,439,933	$	37,852,626	Total BOK Financial deposits	$	38,618,918	$	39,425,951	$	41,242,059	$	38,524,551	$	37,439,933

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 ~~March 31,~~June 30, 2022. 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 ~~$1.1~~$1.3 billion during the quarter, compared to ~~$842 million~~$1.1 billion in the ~~fourth~~first quarter of ~~2021.~~2022.

At ~~March 31,~~June 30, 2022, the estimated unused credit available to BOKF, NA from collateralized sources was approximately ~~$16.4~~$15 billion.

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

- 3537 -

Table 21 -- Borrowed Funds

(In thousands)


				Three Months Ended March 31, 2022							Three Months Ended Dec. 31, 2021								Three Months Ended June 30, 2022							Three Months Ended Mar. 31, 2022
		Mar. 31, 2022		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter	Dec. 31, 2021		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter		June 30, 2022		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter	Mar. 31, 2022		Average Balance During the Quarter		Rate		Maximum Outstanding At Any Month End During the Quarter

Funds purchased	Funds purchased	444,068		371,435		0.57	%	444,068	199,513		337,328		0.63	%	226,605	Funds purchased	163,961		365,054		1.22	%	307,424	444,068		371,435		0.57	%	444,068
Repurchase agreements	Repurchase agreements	624,261		1,633,031		1.04	%	3,034,312	2,126,936		2,555,800		0.74	%	2,920,728	Repurchase agreements	513,069		859,080		0.23	%	595,816	624,261		1,633,031		1.04	%	3,034,312
Other borrowings:	Other borrowings:															Other borrowings:
Federal Home Loan Bank advances	Federal Home Loan Bank advances	—		1,112,222		0.28	%	700,000	—		842,393		0.27	%	—	Federal Home Loan Bank advances	—		1,267,033		0.89	%	—	—		1,112,222		0.28	%	700,000
GNMA repurchase liability	GNMA repurchase liability	6,294		6,530		4.29	%	6,804	7,420		8,440		4.42	%	9,358	GNMA repurchase liability	5,123		5,150		4.05	%	5,123	6,294		6,530		4.29	%	6,804

Other	Other	29,952		29,688		2.39	%	29,952	29,333		30,004		3.29	%	30,724	Other	30,382		29,175		3.23	%	30,382	29,952		29,688		2.39	%	29,952
Total other borrowings	Total other borrowings	36,246		1,148,440		0.38	%		36,753		880,837		0.49	%		Total other borrowings	35,505		1,301,358		1.01	%		36,246		1,148,440		0.38	%
Subordinated debentures1	Subordinated debentures1	131,209		131,228		4.02	%	131,230	131,226		131,224		4.02	%	131,226	Subordinated debentures1	131,223		131,219		4.50	%	131,223	131,209		131,228		4.02	%	131,230

Total other borrowed funds and subordinated debentures	Total other borrowed funds and subordinated debentures	$	1,235,784	$	3,284,134	0.88	%		$	2,494,428	$	3,905,189	0.78	%		Total other borrowed funds and subordinated debentures	$	843,758	$	2,656,711	0.96	%		$	1,235,784	$	3,284,134	0.88	%

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 if delinquent loans are not repurchased from the GNMA mortgage pools.

Parent Company

At ~~March 31,~~June 30, 2022, cash and interest-bearing cash and cash equivalents held by the parent company totaled ~~$233~~$162 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 ~~March 31,~~June 30, 2022, based upon the most restrictive limitations as well as management's internal capital policy, BOKF, NA could declare up to ~~$18~~$206 million of dividends. 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 ~~March 31,~~June 30, 2022 was ~~$4.9~~$4.7 billion, a ~~$515~~$112 million decrease compared to ~~December~~March 31, ~~2021.~~2022. Net income less cash dividends paid increased equity ~~$26~~$97 million during the ~~first~~second quarter of 2022. Changes in interest rates resulted in a ~~$490~~$185 million decrease in accumulated other comprehensive income compared to ~~December~~March 31, ~~2021.~~2022. We also repurchased ~~$48~~$24 million of common stock during the ~~first~~second quarter of 2022. 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 ~~March 31,~~June 30, 2022, ~~3,809,347~~4,103,431 shares have been repurchased under this authorization. The Company repurchased ~~475,877~~294,084 shares of common stock at an average price of ~~$101.02~~$82.98 a share in the ~~first~~second quarter of 2022. We view share buybacks opportunistically, but within the context of maintaining our strong capital position.

- 3638 -

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 1110 basis points to the Company's Common equity Tier 1 capital at ~~March 31,~~June 30, 2022.

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		Mar. 31, 2022		Dec. 31, 2021		Mar. 31, 2021			Minimum Capital Requirement		Capital Conservation Buffer		Minimum Capital Requirement Including Capital Conservation Buffer		June 30, 2022		Mar. 31, 2022		June 30, 2021
Risk-based capital:	Risk-based capital:													Risk-based capital:
Common equity Tier 1	Common equity Tier 1	4.50	%	2.50	%	7.00	%	11.30	%	12.24	%	12.14	%	Common equity Tier 1	4.50	%	2.50	%	7.00	%	11.61	%	11.30	%	11.95	%
Tier 1 capital	Tier 1 capital	6.00	%	2.50	%	8.50	%	11.31	%	12.25	%	12.21	%	Tier 1 capital	6.00	%	2.50	%	8.50	%	11.63	%	11.31	%	12.01	%
Total capital	Total capital	8.00	%	2.50	%	10.50	%	12.25	%	13.29	%	13.98	%	Total capital	8.00	%	2.50	%	10.50	%	12.59	%	12.25	%	13.61	%
Tier 1 Leverage	Tier 1 Leverage	4.00	%	N/A		4.00	%	8.47	%	8.55	%	8.42	%	Tier 1 Leverage	4.00	%	N/A		4.00	%	9.12	%	8.47	%	8.58	%

Average total equity to average assets	Average total equity to average assets							10.18	%	10.61	%	10.48	%	Average total equity to average assets							10.01	%	10.18	%	10.62	%
Tangible common equity ratio	Tangible common equity ratio							8.13	%	8.61	%	8.82	%	Tangible common equity ratio							8.16	%	8.13	%	9.09	%

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.

- 3739 -

Table 23 -- Non-GAAP Measure

(Dollars in thousands)


		Mar. 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			Mar. 31, 2021				June 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			June 30, 2021
Tangible common equity ratio:	Tangible common equity ratio:																Tangible common equity ratio:
Total shareholders' equity	Total shareholders' equity	$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977		$	5,239,462		Total shareholders' equity	$	4,737,339		$	4,849,582		$	5,363,732		$	5,388,973		$	5,332,977
Less: Goodwill and intangible assets, net	Less: Goodwill and intangible assets, net	1,132,510			1,136,527			1,140,935			1,153,785			1,158,676			Less: Goodwill and intangible assets, net	1,128,493			1,132,510			1,136,527			1,140,935			1,153,785
Tangible common equity	Tangible common equity	3,717,072			4,227,205			4,248,038			4,179,192			4,080,786			Tangible common equity	3,608,846			3,717,072			4,227,205			4,248,038			4,179,192
Total assets	Total assets	46,826,507			50,249,431			46,923,409			47,154,375			47,442,513			Total assets	45,377,072			46,826,507			50,249,431			46,923,409			47,154,375
Less: Goodwill and intangible assets, net	Less: Goodwill and intangible assets, net	1,132,510			1,136,527			1,140,935			1,153,785			1,158,676			Less: Goodwill and intangible assets, net	1,128,493			1,132,510			1,136,527			1,140,935			1,153,785
Tangible assets	Tangible assets	$	45,693,997		$	49,112,904		$	45,782,474		$	46,000,590		$	46,283,837		Tangible assets	$	44,248,579		$	45,693,997		$	49,112,904		$	45,782,474		$	46,000,590
Tangible common equity ratio	Tangible common equity ratio	8.13		%	8.61		%	9.28		%	9.09		%	8.82		%	Tangible common equity ratio	8.16		%	8.13		%	8.61		%	9.28		%	9.09		%

Pre-provision net revenue:	Pre-provision net revenue:																Pre-provision net revenue:
Net income before taxes	Net income before taxes	$	78,649		$	152,025		$	241,782		$	215,603		$	186,690		Net income before taxes	$	168,980		$	78,649		$	152,025		$	241,782		$	215,603
Provision for expected credit losses	Provision for expected credit losses	—			(17,000)			(23,000)			(35,000)			(25,000)			Provision for expected credit losses	—			—			(17,000)			(23,000)			(35,000)
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	(36)			(129)			(601)			686			(1,752)			Net income (loss) attributable to non-controlling interests	12			(36)			(129)			(601)			686
Pre-provision net revenue	Pre-provision net revenue	$	78,685		$	135,154		$	219,383		$	179,917		$	163,442		Pre-provision net revenue	$	168,968		$	78,685		$	135,154		$	219,383		$	179,917

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.

- 3840 -

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 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.~~period within established policy limits. 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 200 basis point decrease in interest rates in the current low-rate environment are not meaningful. Until such time as it becomes meaningful, we will instead report the effect of a 100 basis point decrease in interest rates. 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, LIBOR and ~~LIBOR,~~SOFR, 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 indicates 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 ~~6.60~~3.99 percent, or ~~$75.1~~$51.3 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 ~~8.45~~6.39 percent, or ~~$96.1~~$82.2 million for the 200 basis point increase scenario. Additionally, in a flattening yield curve scenario where long-term rates increase by 100 basis points and short-term rates increase by 200 basis points, net interest revenue would increase by approximately ~~3.26~~2.66 percent, or ~~$37.0~~$34.2 million.

Table 24 -- Interest Rate Sensitivity

(Dollars in thousands)


		Mar. 31, 2022						Dec. 31, 2021							June 30, 2022									Mar. 31, 2022
		200 bp Increase			100 bp Increase			200 bp Increase			100 bp Increase				200 bp Increase			100 bp Increase			100 bp Decrease			200 bp Increase			100 bp Increase			100 bp Decrease
Anticipated impact over the next twelve months on net interest revenue	Anticipated impact over the next twelve months on net interest revenue	$	85,608		$	55,495		$	87,241		$	54,213		Anticipated impact over the next twelve months on net interest revenue	$	66,720		$	47,620		$	(62,104)		$	85,608		$	55,495		$	(66,286)
		7.53		%	4.88		%	7.60		%	4.72		%		5.19		%	3.70		%	(4.83)		%	7.53		%	4.88		%	(5.83)		%
Anticipated impact over months twelve through twenty-four	Anticipated impact over months twelve through twenty-four	$	195,813		$	132,326		$	185,054		$	129,850		Anticipated impact over months twelve through twenty-four	$	167,107		$	122,239		$	(168,539)		$	195,813		$	132,326		$	(162,122)
		16.36		%	11.39		%	16.03		%	11.25		%		12.14		%	8.88		%	(12.24)		%	16.36		%	11.39		%	(13.54)		%

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.

- 3941 -

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.

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.

Table 25 -- MSR Asset and Hedge Sensitivity Analysis

(Dollars in thousands)


		Mar. 31, 2022				Dec. 31, 2021					June 30, 2022				Mar. 31, 2022
		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	$	12,025	$	(17,973)	$	31,856	$	(41,815)	MSR Asset	$	8,502	$	(11,579)	$	12,025	$	(17,973)
MSR Hedge	MSR Hedge	(13,708)		13,723		(38,213)		36,692		MSR Hedge	(8,009)		8,080		(13,708)		13,723
Net Exposure	Net Exposure	(1,683)		(4,250)		(6,357)		(5,123)		Net Exposure	493		(3,499)		(1,683)		(4,250)

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												Three Months Ended									Six Months Ended June 30,
		Mar. 31, 2022				Dec. 31, 2021				Mar. 31, 2021					June 30, 2022		Mar. 31, 2022						2022		2021
		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	$	(96)	$	(420)	$	(252)	$	(254)	$	(647)	$	(612)			Average1	$	(81)	$	(158)	$	(96)	$	(420)		$	(89)	$	(288)	$	(555)	$	(547)
Low2	Low2	161		2		103		(62)		(17)		(58)				Low2	76		91		161		2			161		91		(17)		13
High3	High3	(402)		(779)		(621)		(523)		(1,244)		(1,097)				High3	(222)		(327)		(402)		(779)			(402)		(779)		(1,244)		(1,097)
Period End	Period End	(27)		(95)		(85)		(181)		(564)		(422)				Period End	(87)		(20)		(27)		(95)			(87)		(20)		(291)		(408)

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.

- 4042 -

BOK Financial enters into trading activities both as an intermediary for customers and for its own account. As an intermediary, we take positions in securities, generally 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 risk, liquidity risk 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 and manage the market 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. Risk management tools include Value at Risk ("VaR"), stress testing and sensitivity analysis. Economic hedges in either the futures or cash markets may be used to reduce the risk associated with some trading programs. Basis Risk can result when trading asset values and the instruments used to hedge them move at different rates.

VaR measures the potential loss of a given position or portfolio of positions at a specified confidence level and time horizon. BOK Financial utilizes a historical VaR methodology to measure and aggregate risks across its covered trading positions. For Market Risk Rule purposes, the Company calculates VaR using a historical simulation approach and measures the potential trading losses using a 10-day holding period and a 99% confidence level.

Due to inherent limitations of the VaR methodology, including its reliance on past market behavior which might not be indicative of future market performance, VaR is only one of several tools used to measure and manage market risk. Other tools used to actively manage market risk include stress testing (“Stressed VaR”), and sensitivity analysis.

Stressed VaR is calculated using the same internal models as used for the VaR-based measure. Stressed VaR is calculated over a ten-day holding period at a one-tail, 99% confidence level and employs a historical simulation approach based on a continuous twelve-month historical window selected to reflect a period of significant financial stress for the Company’s trading portfolio.

The trading portfolio’s VaR and Stressed VaR profiles are influenced by a variety of factors, including the size and composition of the portfolio, market volatility, and the correlation between different positions. A portfolio of trading positions is typically less risky than the sum of the risk from each of the individual sub-portfolios, because, under normal market conditions, risk within each category partially offsets the exposure to other risk categories. Table 27 below summarizes certain VaR and Stressed VaR based measures for the three months ended June 30, 2022, March 31, 2022, ~~December 31,~~June 30, 2021 and ~~March~~Mar. 31, 2021. In the ~~first~~second quarter of 2022, both VaR measures decreased from the previous quarter. This decrease resulted from a decline in total trading assets and a decrease in basis risk between trading assets and their economic hedges.

Table 27 -- VaR and SVaR Measures


		Three Months Ended											Three Months Ended									Three Months Ended
		Mar. 31, 2022				Dec. 31, 2021				Mar. 31, 2021						June 30, 2022				Mar. 31, 2022				June 30, 2021				Mar. 31, 2021
		10 day 99% VaR		10 day 99% SVaR		10 day 99% VaR		10 day 99% SVaR			10 day 99% VaR			10 day 99% SVaR				10 day 99% VaR		10 day 99% SVaR		10 day 99% VaR		10 day 99% SVaR		10 day 99% VaR		10 day 99% SVaR		10 day 99% VaR		10 day 99% SVaR
Average1	Average1	$	8,759	$	39,402	$	8,930	$	40,010		$	6,836		$	10,266		Average1	$	6,070	$	12,619	$	8,759	$	39,402	$	11,585	$	19,865	$	6,836	$	10,266
Low	Low	5,969		23,910		6,100		21,390			3,500			4,582			Low	2,612		5,820		5,969		23,910		7,151		10,814		3,500		4,582
High	High	14,556		73,790		15,060		67,440			9,951			27,792			High	11,583		25,184		14,556		73,790		18,802		38,031		9,951		27,792
Period End	Period End	8,178		23,988		9,770		45,050			8,038			11,221			Period End	3,386		8,220		8,178		23,988		9,368		20,870		8,038		11,221

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

- 43 -

The Company monitors the accuracy of internal VaR models and modeling processes by back-testing model performance. The Company updates historical data used by the VaR model on a regular basis and model validators independent of business lines perform regular modeled validations to access model input, processing, and reporting components. These models are required to be independently validated and approved prior to implementation.

Limit Structure

Beyond VaR and SVaR described above, Management also performs a sensitivity analysis to measure market risk from changes in interest rates on its trading portfolio. Applicable interest rates are shocked up and down 50 basis points calculating an estimated change in fair value, net of economic hedging activity that may result. The Board has approved an $8 million market risk limit for the trading portfolio, net of economic hedges.

~~- 41 -~~

Table 28 -- Trading Sensitivity Analysis

(Dollars in thousands)


		Three Months Ended												Three Months Ended									Six Months Ended June 30,
		Mar. 31, 2022				Dec. 31, 2021				Mar. 31, 2021					June 30, 2022		Mar. 31, 2022						2022		2021
		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	$	499	$	2,927	$	1,134	$	1,479	$	(2,572)	$	3,553			Average1	$	(435)	$	939	$	499	$	2,927		$	60	$	1,896	$	(1,692)	$	3,747
Low2	Low2	8,643		12,277		8,631		9,319		5,818		8,801				Low2	3,004		4,658		8,643		12,277			8,643		12,277		5,818		13,323
High3	High3	(11,253)		(3,813)		(6,589)		(5,020)		(7,054)		(4,618)				High3	(3,672)		(2,779)		(11,253)		(3,813)			(11,253)		(3,813)		(9,345)		(4,618)
Period End	Period End	49		1,076		1,587		355		(6,548)		7,756				Period End	785		(1,138)		49		1,076			785		(1,138)		3,941		(283)

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.

Governance

Model Risk Governance and Review

BOK Financial has an internal but independent Model Risk Governance and Review ("MRGR") team that validates models to verify they are conceptually sound, computationally accurate, are performing as expected, and are in line with their intended use. MRGR also enforces the company’s model risk governance program that defines roles and responsibilities, including the authority to levy findings requiring remediation and to restrict model usage.

Model Validation

MRGR is independent of both the developers and users of the models. The team validates models through an evaluation process that assesses the data, theory, implementation, outcomes, and governance of each scenario. MRGR assigns each model a model risk score which determines the frequency and scope of each validation. Validations comprise an assessment of model performance as well as a model’s potential limitations given its particular assumptions or weaknesses. Based on the results of the review, the team determines the use case for the model. The ultimate validation results may require remediation actions from the business line. MRGR communicates their result as one of the following three outcomes: “Approved for use”, “Approved with findings”, or “Unapproved”.

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 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.

- 44 -

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.

- 4245 -

Consolidated Statements of Earnings (Unaudited)
(In thousands, except share and per share data) Three Months Ended
March 31,
Interest revenue 2022 2021
Loans $ 178,373 $ 197,574
Residential mortgage loans held for sale 1,394 1,380
Trading securities 40,975 35,922
Investment securities 2,354 2,726
Available for sale securities 57,932 58,608
Fair value option securities 491 496
Restricted equity securities 1,107 1,359
Interest-bearing cash and cash equivalents 473 174
Total interest revenue 283,099 298,239
Interest expense
Deposits 7,598 9,850
Borrowed funds 5,788 4,622
Subordinated debentures 1,302 3,347
Total interest expense 14,688 17,819
Net interest revenue 268,411 280,420
Provision for credit losses — (25,000)
Net interest revenue after provision for credit losses 268,411 305,420
Other operating revenue
Brokerage and trading revenue (27,079) 20,782
Transaction card revenue 24,216 22,430
Fiduciary and asset management revenue 46,399 41,322
Deposit service charges and fees 27,004 24,209
Mortgage banking revenue 16,650 37,113
Other revenue 10,445 16,296
Total fees and commissions 97,635 162,152
Other gains (losses), net (1,644) 10,121
Loss on derivatives, net (46,981) (27,650)
Loss on fair value option securities, net (11,201) (1,910)
Change in fair value of mortgage servicing rights 49,110 33,874
Gain on available for sale securities, net 937 467
Total other operating revenue 87,856 177,054
Other operating expense
Personnel 159,228 173,010
Business promotion 6,513 2,154
Charitable contributions to BOKF Foundation — 4,000
Professional fees and services 11,413 11,980
Net occupancy and equipment 30,855 26,662
Insurance 4,283 4,620
Data processing and communications 39,836 37,467
Printing, postage and supplies 3,689 3,440
Amortization of intangible assets 3,964 4,807
Mortgage banking costs 7,877 13,943
Other expense 9,960 13,701
Total other operating expense 277,618 295,784
Net income before taxes 78,649 186,690
Federal and state income taxes 16,197 42,382
Net income 62,452 144,308
Net loss attributable to non-controlling interests (36) (1,752)
Net income attributable to BOK Financial Corporation shareholders $ 62,488 $ 146,060
Earnings per share:
Basic $ 0.91 $ 2.10
Diluted $ 0.91 $ 2.10
Average shares used in computation:
Basic 67,812,400 69,137,375
Diluted 67,813,851 69,141,710
Dividends declared per share $ 0.53 $ 0.52

~~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
March 31,
2022 2021
Net income $ 62,452 $ 144,308
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss) (639,041) (150,131)
Reclassification adjustments included in earnings:
Gain on available for sale securities, net (937) (467)
Other comprehensive loss before income taxes (639,978) (150,598)
Federal and state income taxes (149,781) (36,139)
Other comprehensive loss, net of income taxes (490,197) (114,459)
Comprehensive income (loss) (427,745) 29,849
Comprehensive loss attributable to non-controlling interests (36) (1,752)
Comprehensive income (loss) attributable to BOK Financial Corp. shareholders $ (427,709) $ 31,601


Consolidated Statements of Earnings (Unaudited)
(In thousands, except share and per share data)	Three Months Ended				Six Months Ended
	June 30,				June 30,
Interest revenue	2022		2021		2022		2021
Loans	$	204,015	$	193,841	$	382,388	$	391,415
Residential mortgage loans held for sale	1,559		1,569		2,953		2,949
Trading securities	22,958		36,655		63,933		72,577
Investment securities	3,485		2,608		5,839		5,334
Available for sale securities	58,672		58,909		116,604		117,517
Fair value option securities	437		402		928		898
Restricted equity securities	1,384		1,751		2,491		3,110
Interest-bearing cash and cash equivalents	1,737		158		2,210		332
Total interest revenue	294,247		295,893		577,346		594,132
Interest expense
Deposits	13,862		8,425		21,460		18,275
Borrowed funds	4,894		3,806		10,682		8,428
Subordinated debentures	1,473		3,353		2,775		6,700
Total interest expense	20,229		15,584		34,917		33,403
Net interest revenue	274,018		280,309		542,429		560,729
Provision for credit losses	—		(35,000)		—		(60,000)
Net interest revenue after provision for credit losses	274,018		315,309		542,429		620,729
Other operating revenue
Brokerage and trading revenue	44,043		29,408		16,964		50,190
Transaction card revenue	26,940		24,923		51,156		47,353
Fiduciary and asset management revenue	49,838		44,832		96,237		86,154
Deposit service charges and fees	28,500		25,861		55,504		50,070
Mortgage banking revenue	11,368		21,219		28,018		58,332
Other revenue	12,684		23,172		23,129		39,468
Total fees and commissions	173,373		169,415		271,008		331,567
Other gains (losses), net	(7,639)		16,449		(9,283)		26,570
Gain (loss) on derivatives, net	(13,569)		18,820		(60,550)		(8,830)
Loss on fair value option securities, net	(2,221)		(1,627)		(13,422)		(3,537)
Change in fair value of mortgage servicing rights	17,485		(13,041)		66,595		20,833
Gain on available for sale securities, net	1,188		1,430		2,125		1,897



Total other operating revenue	168,617		191,446		256,473		368,500
Other operating expense
Personnel	154,923		172,035		314,151		345,045
Business promotion	6,325		2,744		12,838		4,898
Charitable contributions to BOKF Foundation	—		—		—		4,000
Professional fees and services	12,475		12,361		23,888		24,341
Net occupancy and equipment	27,489		26,633		58,344		53,295
Insurance	4,728		3,660		9,011		8,280
Data processing and communications	41,280		36,418		81,116		73,885
Printing, postage and supplies	3,929		4,285		7,618		7,725
Amortization of intangible assets	4,049		4,578		8,013		9,385
Mortgage banking costs	9,437		11,126		17,314		25,069
Other expense	9,020		17,312		18,980		31,013
Total other operating expense	273,655		291,152		551,273		586,936
Net income before taxes	168,980		215,603		247,629		402,293
Federal and state income taxes	36,122		48,496		52,319		90,878
Net income	132,858		167,107		195,310		311,415
Net loss attributable to non-controlling interests	12		686		(24)		(1,066)
Net income attributable to BOK Financial Corporation shareholders	$	132,846	$	166,421	$	195,334	$	312,481
Earnings per share:
Basic	$	1.96	$	2.40	$	2.87	$	4.50
Diluted	$	1.96	$	2.40	$	2.87	$	4.50
Average shares used in computation:
Basic	67,453,748		68,815,666		67,616,396		68,975,743
Diluted	67,455,172		68,817,442		67,617,834		68,978,798
Dividends declared per share	$	0.53	$	0.52	$	1.06	$	1.04

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

~~- 44 -~~

~~Consolidated Balance Sheets~~

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

Mar. 31, 2022 Dec. 31, 2021
(Unaudited) (Footnote 1)
Assets
Cash and due from banks $ 767,805 $ 712,067
Interest-bearing cash and cash equivalents 599,976 2,125,343
Trading securities 4,891,096 9,136,813
Investment securities, net of allowance (fair value: March 31, 2022 – $191,235; December 31, 2021 – $231,395)
183,824 210,444
Available for sale securities 12,894,534 13,157,817
Fair value option securities 185,003 43,770
Restricted equity securities 77,389 83,113
Residential mortgage loans held for sale 169,474 192,295
Loans 20,674,429 20,205,680
Allowance for loan losses (246,473) (256,421)
Loans, net of allowance 20,427,956 19,949,259
Premises and equipment, net 574,786 574,148
Receivables 238,694 223,021
Goodwill 1,044,749 1,044,749
Intangible assets, net 87,761 91,778
Mortgage servicing rights 209,563 163,198
Real estate and other repossessed assets, net of allowance (March 31, 2022 – $5,977; December 31, 2021 –
$6,083)
24,492 24,589
Derivative contracts, net 2,680,207 1,097,297
Cash surrender value of bank-owned life insurance 407,763 405,607
Receivable on unsettled securities sales 229,404 56,172
Other assets 1,132,031 957,951
Total assets $ 46,826,507 $ 50,249,431
Liabilities and Equity
Liabilities:
Noninterest-bearing demand deposits $ 15,242,341 $ 15,344,423
Interest-bearing deposits:
Transaction 21,689,829 23,268,573
Savings 979,365 924,735
Time 1,514,416 1,704,328
Total deposits 39,425,951 41,242,059
Funds purchased and repurchase agreements 1,068,329 2,326,449
Other borrowings 36,246 36,753
Subordinated debentures 131,209 131,226
Accrued interest, taxes and expense 238,048 273,041
Derivative contracts, net 557,834 275,625
Due on unsettled securities purchases 81,016 160,686
Other liabilities 434,350 435,221
Total liabilities 41,972,983 44,881,060
Shareholders' equity:
Common stock ($0.00006 par value; 2,500,000,000 shares authorized; shares issued and outstanding: March 31, 2022 – 76,412,230; December 31, 2021 – 76,254,029)
5 5
Capital surplus 1,381,666 1,378,794
Retained earnings 4,473,884 4,447,691
Treasury stock (shares at cost: March 31, 2022 – 8,308,187; December 31, 2021 – 7,786,257)
(588,147) (535,129)
Accumulated other comprehensive gain (loss) (417,826) 72,371
Total shareholders’ equity 4,849,582 5,363,732
Non-controlling interests 3,942 4,639
Total equity 4,853,524 5,368,371
Total liabilities and equity $ 46,826,507 $ 50,249,431

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

~~- 45 -~~

~~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, December 31, 2021 76,254 $ 5 $ 1,378,794 $ 4,447,691 7,786 $ (535,129) $ 72,371 $ 5,363,732 $ 4,639 $ 5,368,371
Net income (loss) — — — 62,488 — — — 62,488 (36) 62,452
Other comprehensive loss — — — — — — (490,197) (490,197) — (490,197)
Repurchase of common stock — — — — 476 (48,074) — (48,074) — (48,074)
Share-based compensation plans:
Stock options exercised 1 — 37 — — — — 37 — 37
Non-vested shares awarded,
     net 157 — — — — — — — — —
Vesting of non-vested
     shares — — — — 46 (4,944) — (4,944) — (4,944)
Share-based compensation — — 2,835 — — — — 2,835 — 2,835
Cash dividends on common
     stock — — — (36,295) — — — (36,295) — (36,295)
Capital calls and distributions,
     net — — — — — — — — (661) (661)
Balance, March 31, 2022 76,412 $ 5 $ 1,381,666 $ 4,473,884 8,308 $ (588,147) $ (417,826) $ 4,849,582 $ 3,942 $ 4,853,524
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 (loss) — — — 146,060 — — — 146,060 (1,752) 144,308
Other comprehensive loss — — — — — — (114,459) (114,459) — (114,459)
Repurchase of common stock — — — — 260 (20,071) — (20,071) — (20,071)
Share-based compensation
     plans:
Stock options exercised 17 — 949 — — — — 949 — 949
Non-vested shares awarded,
     net 232 — — — — — — — — —
Vesting of non-vested
     shares — — — — 68 (5,815) — (5,815) — (5,815)
Share-based compensation — — 2,724 — — — — 2,724 — 2,724
Cash dividends on common
     stock — — — (36,192) — — — (36,192) — (36,192)
Capital calls and distributions,
     net — — — — — — — — (661) (661)
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

See accompanying notes to consolidated financial statements.

- 46 -

~~Consolidated Statements of Cash Flows (Unaudited)~~

~~(in thousands)~~

Three Months Ended
March 31,
2022 2021
Cash Flows From Operating Activities:
Net income $ 62,452 $ 144,308
Adjustments to reconcile net income to net cash provided (used in) operating activities:
Provision for credit losses — (25,000)
Change in fair value of mortgage servicing rights due to market assumption changes (49,110) (33,874)
Change in the fair value of mortgage servicing rights due to principal payments 7,960 11,961
Net unrealized (gains) losses from derivative contracts (31,298) 92,502
Share-based compensation 2,835 2,724
Depreciation and amortization 26,091 24,918
Net amortization of discounts and premiums 3,216 4,853
Net losses (gains) on financial instruments and other losses (gains), net 706 (10,587)
Net gain on mortgage loans held for sale (1,056) (19,045)
Mortgage loans originated for sale (418,866) (843,053)
Proceeds from sale of mortgage loans held for sale 446,742 836,209
Capitalized mortgage servicing rights (5,215) (9,830)
Change in trading and fair value option securities 4,104,453 (335,624)
Change in receivables (88,559) 15,650
Change in other assets (19,589) (24,991)
Change in other liabilities (107,508) (49,998)
Net cash provided by (used in) operating activities 3,933,254 (218,877)
Cash Flows From Investing Activities:
Proceeds from maturities or redemptions of investment securities 26,363 18,624
Proceeds from maturities or redemptions of available for sale securities 723,730 877,257
Purchases of available for sale securities (1,161,606) (1,451,909)
Proceeds from sales of available for sale securities 55,185 56,037
Change in amount receivable on unsettled available for sale securities transactions (99,944) (26,130)
Loans originated, net of principal collected (460,128) 498,667
Net payments on derivative asset contracts 34,855 (7,016)
Net change in restricted equity securities 5,724 31,777
Proceeds from disposition of assets 9,708 43,739
Purchases of assets (37,569) (63,110)
Net cash provided by (used in) investing activities (903,682) (22,064)
Cash Flows From Financing Activities:
Net change in demand deposits, transaction deposits and savings accounts (1,626,196) 1,671,518
Net change in time deposits (189,912) 37,228
Net change in other borrowed funds (1,271,195) (1,078,174)
Net proceeds on derivative liability contracts (30,779) 8,437
Net change in derivative margin accounts (1,274,645) 2,995
Change in amount due on unsettled available for sale securities transactions (17,198) (101,311)
Issuance of common and treasury stock, net (4,907) (4,866)
Repurchase of common stock (48,074) (20,071)
Dividends paid (36,295) (36,192)
Net cash provided by (used in) financing activities (4,499,201) 479,564
Net increase (decrease) in cash and cash equivalents (1,469,629) 238,623
Cash and cash equivalents at beginning of period 2,837,410 1,180,573
Cash and cash equivalents at end of period $ 1,367,781 $ 1,419,196
Supplemental Cash Flow Information:
Cash paid for interest $ 13,982 $ 16,743
Cash paid for taxes $ 858 $ 852
Net loans and bank premises transferred to repossessed real estate and other assets $ 64 $ 147
Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period $ 12,568 $ 36,496
Conveyance of other real estate owned guaranteed by U.S. government agencies $ 1,812 $ 1,448
Right-of-use assets obtained in exchange for operating lease liabilities $ 9,241 $ 1,191


Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands, except share and per share data)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income	$	132,858	$	167,107	$	195,310	$	311,415
Other comprehensive income (loss) before income taxes:
Net change in unrealized gain (loss)	(242,536)		8,480		(881,577)		(141,651)
Reclassification adjustments included in earnings:
Interest revenues, Investment securities	2,455		—		2,455		—


Gain on available for sale securities, net	(1,188)		(1,430)		(2,125)		(1,897)
Other comprehensive income (loss) before income taxes	(241,269)		7,050		(881,247)		(143,548)
Federal and state income taxes	(56,467)		1,691		(206,248)		(34,448)
Other comprehensive income (loss), net of income taxes	(184,802)		5,359		(674,999)		(109,100)
Comprehensive income (loss)	(51,944)		172,466		(479,689)		202,315
Comprehensive income (loss) attributable to non-controlling interests	12		686		(24)		(1,066)
Comprehensive income (loss) attributable to BOK Financial Corp. shareholders	$	(51,956)	$	171,780	$	(479,665)	$	203,381

See accompanying notes to consolidated financial statements.

- 47 -

Consolidated Balance Sheets

(In thousands, except share data)


	June 30, 2022		Dec. 31, 2021
	(Unaudited)		(Footnote 1)
Assets
Cash and due from banks	$	1,313,563	$	712,067
Interest-bearing cash and cash equivalents	723,787		2,125,343
Trading securities	2,859,444		9,136,813
Investment securities, net of allowance (fair value: June 30, 2022 – $2,607,757; December 31, 2021 – $231,395)	2,637,345		210,444
Available for sale securities	10,152,663		13,157,817
Fair value option securities	37,927		43,770
Restricted equity securities	95,130		83,113
Residential mortgage loans held for sale	182,726		192,295
Loans	21,291,148		20,205,680
Allowance for loan losses	(241,114)		(256,421)
Loans, net of allowance	21,050,034		19,949,259
Premises and equipment, net	573,605		574,148
Receivables	176,672		223,021
Goodwill	1,044,749		1,044,749
Intangible assets, net	83,744		91,778
Mortgage servicing rights	270,312		163,198
Real estate and other repossessed assets, net of allowance (June 30, 2022 – $10,822; December 31, 2021 – $6,083)	22,221		24,589
Derivative contracts, net	1,992,977		1,097,297
Cash surrender value of bank-owned life insurance	409,937		405,607
Receivable on unsettled securities sales	60,168		56,172
Other assets	1,690,068		957,951
Total assets	$	45,377,072	$	50,249,431

Liabilities and Equity
Liabilities:
Noninterest-bearing demand deposits	$	15,720,296	$	15,344,423
Interest-bearing deposits:
Transaction	20,544,199		23,268,573
Savings	984,824		924,735
Time	1,369,599		1,704,328
Total deposits	38,618,918		41,242,059
Funds purchased and repurchase agreements	677,030		2,326,449
Other borrowings	35,505		36,753
Subordinated debentures	131,223		131,226
Accrued interest, taxes and expense	211,419		273,041
Derivative contracts, net	214,576		275,625
Due on unsettled securities purchases	297,352		160,686
Other liabilities	449,507		435,221
Total liabilities	40,635,530		44,881,060
Shareholders' equity:
Common stock ($0.00006 par value; 2,500,000,000 shares authorized; shares issued and outstanding: June 30, 2022 – 76,408,276; December 31, 2021 – 76,254,029)	5		5
Capital surplus	1,381,676		1,378,794
Retained earnings	4,570,837		4,447,691
Treasury stock (shares at cost: June 30, 2022 – 8,602,271; December 31, 2021 – 7,786,257)	(612,551)		(535,129)
Accumulated other comprehensive income (loss)	(602,628)		72,371
Total shareholders’ equity	4,737,339		5,363,732
Non-controlling interests	4,203		4,639
Total equity	4,741,542		5,368,371
Total liabilities and equity	$	45,377,072	$	50,249,431

See accompanying notes to consolidated financial statements.

- 48 -

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, 2022	76,412		$	5	$	1,381,666	$	4,473,884	8,308	$	(588,147)	$	(417,826)	$	4,849,582	$	3,942	$	4,853,524
Net income (loss)	—		—		—		132,846		—	—		—		132,846		12		132,858
Other comprehensive loss	—		—		—		—		—	—		(184,802)		(184,802)		—		(184,802)
Repurchase of common stock	—		—		—		—		294	(24,404)		—		(24,404)		—		(24,404)
Share-based compensation plans:
Stock options exercised	—		—		—		—		—	—		—		—		—		—
Non-vested shares awarded, net	(4)		—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—		—		—		—		—	—		—		—		—		—
Share-based compensation	—		—		10		—		—	—		—		10		—		10
Cash dividends on common stock	—		—		—		(35,893)		—	—		—		(35,893)		—		(35,893)
Capital calls and distributions, net	—		—		—		—		—	—		—		—		249		249


Balance, June 30, 2022	76,408		$	5	$	1,381,676	$	4,570,837	8,602	$	(612,551)	$	(602,628)	$	4,737,339	$	4,203	$	4,741,542

Balance, December 31, 2021	76,254		$	5	$	1,378,794	$	4,447,691	7,786	$	(535,129)	$	72,371	$	5,363,732	$	4,639	$	5,368,371


Net income (loss)	—		—		—		195,334		—	—		—		195,334		(24)		195,310
Other comprehensive loss	—		—		—		—		—	—		(674,999)		(674,999)		—		(674,999)
Repurchase of common stock	—		—		—		—		770	(72,478)		—		(72,478)		—		(72,478)
Share-based compensation plans:
Stock options exercised	1		—		37		—		—	—		—		37		—		37
Non-vested shares awarded, net	153		—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—		—		—		—		46	(4,944)		—		(4,944)		—		(4,944)
Share-based compensation	—		—		2,845		—		—	—		—		2,845		—		2,845
Cash dividends on common stock	—		—		—		(72,188)		—	—		—		(72,188)		—		(72,188)
Capital calls and distributions, net	—		—		—		—		—	—		—		—		(412)		(412)


Balance, June 30, 2022	$	76,408	$	5	$	1,381,676	$	4,570,837	8,602	$	(612,551)	$	(602,628)	$	4,737,339	$	4,203	$	4,741,542

- 49 -


	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 income	—	—		—		—		—	—		5,359		5,359		—		5,359
Repurchase of common stock	—	—		—		—		493	(43,797)		—		(43,797)		—		(43,797)
Share-based compensation plans:
Stock options exercised	—	—		—		—		—	—		—		—		—		—
Non-vested shares awarded, net	14	—		—		—		—	—		—		—		—		—
Vesting of non-vested shares	—	—		—		—		—	—		—		—		—		—
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 (loss)	—	—		—		312,481		—	—		—		312,481		(1,066)		311,415
Other comprehensive loss	—	—		—		—		—	—		(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	—		—		—		—	—		—		—		—		—
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

See accompanying notes to consolidated financial statements.

- 50 -

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Six Months Ended
	June 30,
	2022		2021
Cash Flows From Operating Activities:
Net income	$	195,310	$	311,415
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses	—		(60,000)
Change in fair value of mortgage servicing rights due to market assumption changes	(66,595)		(20,833)
Change in the fair value of mortgage servicing rights due to principal payments	15,317		22,143
Net unrealized (gains) losses from derivative contracts	(47,004)		40,581
Share-based compensation	2,845		4,090
Depreciation and amortization	52,971		50,185
Net amortization of discounts and premiums	6,417		9,607
Net losses (gains) on financial instruments and other losses (gains), net	7,157		(28,463)
Net gain on mortgage loans held for sale	(6,521)		(41,611)
Mortgage loans originated for sale	(779,103)		(1,597,946)
Proceeds from sale of mortgage loans held for sale	793,223		1,684,711
Capitalized mortgage servicing rights	(10,969)		(17,767)

Change in trading and fair value option securities	6,283,157		(936,759)
Change in receivables	62,029		60,286
Change in other assets	(17,067)		(16)
Change in other liabilities	(55,875)		32,611
Net cash provided by (used in) operating activities	6,435,292		(487,766)
Cash Flows From Investing Activities:
Proceeds from maturities or redemptions of investment securities	26,730		23,870
Proceeds from maturities or redemptions of available for sale securities	1,365,103		1,782,153

Purchases of available for sale securities	(1,919,632)		(2,602,658)
Proceeds from sales of available for sale securities	211,301		394,146
Change in amount receivable on unsettled available for sale securities transactions	(19,793)		(19,509)
Loans originated, net of principal collected	(1,070,725)		1,621,847
Net payments on derivative asset contracts	151,559		(232,861)

Net change in restricted equity securities	(12,017)		36,506
Proceeds from disposition of assets	11,559		70,443
Purchases of assets	(119,302)		(95,077)
Net cash provided by (used in) investing activities	(1,375,217)		978,860
Cash Flows From Financing Activities:
Net change in demand deposits, transaction deposits and savings accounts	(2,288,412)		1,357,832
Net change in time deposits	(334,729)		(61,779)
Net change in other borrowed funds	(1,671,503)		(1,324,500)


Net proceeds on derivative liability contracts	(131,361)		234,074
Net change in derivative margin accounts	(1,417,338)		(649,717)
Change in amount due on unsettled available for sale securities transactions	132,781		172,638
Issuance of common and treasury stock, net	(4,907)		(4,866)

Repurchase of common stock	(72,478)		(63,868)
Dividends paid	(72,188)		(72,026)
Net cash provided by (used in) financing activities	(5,860,135)		(412,212)
Net increase (decrease) in cash and cash equivalents	(800,060)		78,882
Cash and cash equivalents at beginning of period	2,837,410		1,180,573
Cash and cash equivalents at end of period	$	2,037,350	$	1,259,455

Supplemental Cash Flow Information:
Cash paid for interest	$	35,094	$	32,161
Cash paid for taxes	$	66,862	$	96,994
Net loans and bank premises transferred to repossessed real estate and other assets	$	4,080	$	289
Transfer of available for sale securities to investment securities	$	2,454,273	$	—
Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period	$	20,836	$	55,558
Conveyance of other real estate owned guaranteed by U.S. government agencies	$	3,478	$	3,009
Right-of-use assets obtained in exchange for operating lease liabilities	$	15,506	$	6,192

See accompanying notes to consolidated financial statements.

- 51 -

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 2021 Form 10-K filed with the Securities and Exchange Commission, which contains audited financial statements. Amounts presented as of December 31, 2021 have been derived from the audited financial statements included in BOK Financial’s 2021 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 ~~three-month~~six-month period ended ~~March 31,~~June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

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 did not 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 did not have a material impact on the Company's financial statements.

- 4852 -

FASB Accounting Standards Update No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02")

On March 31, 2022, the FASB issued ASU 2022-02 which eliminates the accounting guidance on troubled debt restructurings ("TDRs") for creditors in ASC 310-40, while also no longer requiring an entity to consider renewals, modifications, and extensions that result from reasonably expected TDRs in their calculation of the allowance for credit losses. For receivables for which there has been a modification in their contractual cash flows, ASU 2022-02 requires disclosure, by class of financing receivable, of the types of modifications, the financial effects of those modifications, and the performance of these modified receivables, along with receivables that had a payment default during the current period and had modifications to the contractual cash flows within 12 months prior to the default. Further, ASU 2022-02 requires entities to disclose gross write-offs recorded in the current period by year of origination in the vintage disclosures on a year-to-date basis. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022 and amendments related to TDR recognition and measurement may be applied using either a prospective or modified retrospective transition method, while amendments on TDR and vintage disclosures are to be adopted prospectively. Management is currently evaluating the impact of ASU 2022-02 on the Company's financial statements.

- 4953 -

(2) Securities

Trading Securities

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


		March 31, 2022				December 31, 2021					June 30, 2022				December 31, 2021
		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	$	13,513	$	(10)	$	23,610	$	40	U.S. government securities	$	8,357	$	—	$	23,610	$	40
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	4,827,504		(135,438)		9,068,900		(9,338)		Residential agency mortgage-backed securities	2,807,950		(20,447)		9,068,900		(9,338)
Municipal securities	Municipal securities	24,539		(478)		25,783		34		Municipal securities	18,825		(11)		25,783		34
Other trading securities	Other trading securities	25,540		(148)		18,520		(26)		Other trading securities	24,312		(9)		18,520		(26)
Total trading securities	Total trading securities	$	4,891,096	$	(136,074)	$	9,136,813	$	(9,290)	Total trading securities	$	2,859,444	$	(20,467)	$	9,136,813	$	(9,290)

Investment Securities

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

March 31, 2022
Amortized Fair Gross Unrealized
Cost Value Gain Loss
Municipal securities $ 177,683 $ 184,214 $ 7,155 $ (624)
Residential agency mortgage-backed securities 6,486 6,741 283 (28)
Other debt securities 288 280 — (8)
Total investment securities 184,457 191,235 7,438 (660)
Allowance for credit losses (633)
Investment securities, net of allowance $ 183,824 $ 191,235 $ 7,438 $ (660)


		December 31, 2021									June 30, 2022
		Amortized		Fair		Gross Unrealized					Amortized		Carrying		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value1		Value		Gain		Loss
Municipal securities	Municipal securities	$	203,772	$	223,609	$	19,851	$	(14)	Municipal securities	$	175,974	$	175,974	$	180,783	$	5,819	$	(1,010)
Residential agency mortgage-backed securities		6,939		7,500		561		—
Mortgage-backed securities:										Mortgage-backed securities:
Residential agency										Residential agency	2,709,094		2,445,845		2,410,926		272		(35,191)
Commercial agency										Commercial agency	17,260		15,455		15,279		—		(176)
Other debt securities	Other debt securities	288		286		—		(2)		Other debt securities	788		788		769		—		(19)
Total investment securities	Total investment securities	210,999		231,395		20,412		(16)		Total investment securities	2,903,116		2,638,062		2,607,757		6,091		(36,396)
Allowance for credit losses	Allowance for credit losses	(555)								Allowance for credit losses	(717)		(717)
Investment securities, net of allowance	Investment securities, net of allowance	$	210,444	$	231,395	$	20,412	$	(16)	Investment securities, net of allowance	$	2,902,399	$	2,637,345	$	2,607,757	$	6,091	$	(36,396)

1 Carrying value includes $265 million of net unrealized loss which remains in Accumulated other comprehensive income ("AOCI") in the Consolidated Balance Sheets related to certain securities transferred from the Available for Sale securities portfolio to the Investment securities portfolio as discussed in greater detail following.


	December 31, 2021
	Amortized		Carrying		Fair		Gross Unrealized
	Cost		Value		Value		Gain		Loss
Municipal securities	$	203,772	$	203,772	$	223,609	$	19,851	$	(14)
Mortgage-backed securities:
Residential agency	6,939		6,939		7,500		561		—
Other debt securities	288		288		286		—		(2)
Total investment securities	210,999		210,999		231,395		20,412		(16)
Allowance for credit losses	(555)		(555)
Investment securities, net of allowance	$	210,444	$	210,444	$	231,395	$	20,412	$	(16)

- 5054 -

During the three months ended June 30, 2022, the Company transferred certain U.S. government agency mortgage-backed securities from the available for sale portfolio to the investment securities portfolio (held-to-maturity) as the Company has the positive intent and ability to hold these securities to maturity. No gains or losses were recognized in the Consolidated Statements of Earnings at the time of the transfer. Transfers of debt securities into the investment securities portfolio (held-to-maturity) are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the investment securities portfolio. Such amounts are amortized over the estimated life of the security as an adjustment to yield, offsetting the related amortization of the premium or accretion of the discount on the transferred securities. At the time of transfer, the fair value totaled $2.4 billion, amortized cost totaled $2.7 billion and the pretax unrealized loss totaled $268 million.

The amortized cost and fair values of investment securities at ~~March 31,~~June 30, 2022, 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		$	14,901	$	104,681	$	52,359	$	6,030	$	177,971	4.55
Carrying value													Carrying value	$	14,890	$	105,177	$	67,111	$	5,039	$	192,217	4.49
Fair value	Fair value	15,080		110,636		52,834		5,944		184,494			Fair value	15,018		110,157		66,625		5,031		196,831
Residential mortgage-backed securities:	Residential mortgage-backed securities:												Residential mortgage-backed securities:
Amortized cost										$	6,486	2
Carrying value													Carrying value									$	2,445,845	2
Fair value	Fair value									6,741			Fair value									2,410,926
Total investment securities:	Total investment securities:												Total investment securities:
Amortized cost										$	184,457
Carrying value													Carrying value									$	2,638,062
Fair value	Fair value									191,235			Fair value									2,607,757

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 ~~4.4~~5.4 years based upon current prepayment assumptions.

Temporarily Impaired Investment Securities

(in thousands):


		March 31, 2022																					June 30, 2022
		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	35		$	22,394		$	566		$	544		$	58		$	22,938		$	624	Municipal securities		56		$	27,968		$	935		$	527		$	75		$	28,495		$	1,010
Residential agency mortgage-backed securities		1		1,534			28			—			—			1,534			28
Mortgage-backed securities:																					Mortgage-backed securities:
Residential agency																					Residential agency		115		2,408,180			35,191			—			—			2,408,180			35,191
Commercial agency																					Commercial agency		2		15,279			176			—			—			15,279			176
Other debt securities	Other debt securities	2		243			7			24			1			267			8		Other debt securities		2		234			17			23			2			257			19
Total investment securities	Total investment securities	38		$	24,171		$	601		$	568		$	59		$	24,739		$	660	Total investment securities		175		$	2,451,661		$	36,319		$	550		$	77		$	2,452,211		$	36,396


	December 31, 2021
	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	1	$	—	$	—	$	587	$	14	$	587	$	14

Other debt securities	2	273		2		—		—		273		2
Total investment securities	3	$	273	$	2	$	587	$	14	$	860	$	16

- 5155 -

Available for Sale Securities

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


		March 31, 2022									June 30, 2022
		Amortized		Fair		Gross Unrealized					Amortized		Fair		Gross Unrealized
		Cost		Value		Gain		Loss			Cost		Value		Gain		Loss
U.S. Treasury	U.S. Treasury	$	1,000	$	947	$	—	$	(53)	U.S. Treasury	$	1,000	$	927	$	—	$	(73)
Municipal securities	Municipal securities	562,065		526,322		144		(35,887)		Municipal securities	686,224		638,305		1,039		(48,958)
Mortgage-backed securities:	Mortgage-backed securities:									Mortgage-backed securities:
Residential agency	Residential agency	7,913,760		7,612,021		14,727		(316,466)		Residential agency	5,088,155		4,913,245		2,309		(177,219)
Residential non-agency	Residential non-agency	339,904		347,187		13,279		(5,996)		Residential non-agency	530,947		519,613		11,784		(23,118)
Commercial agency	Commercial agency	4,623,902		4,407,585		2,809		(219,126)		Commercial agency	4,368,649		4,080,101		61		(288,609)
Other debt securities	Other debt securities	500		472		—		(28)		Other debt securities	500		472		—		(28)
Total available for sale securities	Total available for sale securities	$	13,441,131	$	12,894,534	$	30,959	$	(577,556)	Total available for sale securities	$	10,675,475	$	10,152,663	$	15,193	$	(538,005)


	December 31, 2021
	Amortized		Fair		Gross Unrealized
	Cost		Value		Gain		Loss
U.S. Treasury	$	1,001	$	1,000	$	—	$	(1)
Municipal securities	515,551		508,365		1,302		(8,488)
Mortgage-backed securities:
Residential agency	7,908,587		8,006,616		155,477		(57,448)
Residential non-agency	10,625		24,339		13,714		—
Commercial agency	4,628,172		4,617,025		36,868		(48,015)
Other debt securities	500		472		—		(28)
Total available for sale securities	$	13,064,436	$	13,157,817	$	207,361	$	(113,980)

The amortized cost and fair values of available for sale securities at ~~March 31,~~June 30, 2022, 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	$	48,510	$	1,968,389	$	2,683,456	$	487,112	$	5,187,467	6.59	Amortized cost	$	46,384	$	1,994,203	$	2,546,615	$	469,171	$	5,056,373	6.42
Fair value	Fair value	48,612		1,911,239		2,507,611		467,864		4,935,326			Fair value	46,421		1,911,712		2,317,565		444,287		4,719,805
Residential mortgage-backed securities:	Residential mortgage-backed securities:												Residential mortgage-backed securities:
Amortized cost	Amortized cost									$	8,253,664	2	Amortized cost									$	5,619,102	2
Fair value	Fair value									7,959,208			Fair value									5,432,858
Total available for sale securities:	Total available for sale securities:												Total available for sale securities:
Amortized cost	Amortized cost									$	13,441,131		Amortized cost									$	10,675,475
Fair value	Fair value									12,894,534			Fair value									10,152,663

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.

- 5256 -

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


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021				2022		2021		2022		2021
Proceeds	Proceeds	$	55,185	$	56,037		Proceeds	$	156,116	$	338,109	$	211,301	$	394,146
Gross realized gains	Gross realized gains	1,933		473			Gross realized gains	1,461		1,767		3,394		2,240
Gross realized losses	Gross realized losses	(996)		(6)			Gross realized losses	(273)		(337)		(1,269)		(343)
Related federal and state income tax expense	Related federal and state income tax expense	219		119			Related federal and state income tax expense	278		336		497		455

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 ~~$10.0~~$9.7 billion at ~~March 31,~~June 30, 2022 and $10.2 billion at December 31, 2021. The secured parties do not have the right to sell or repledge these securities.

Temporarily Impaired Available for Sale Securities

(in thousands)


		March 31, 2022																					June 30, 2022
		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:
U.S. Treasury	U.S. Treasury	1		$	947		$	53		$	—		$	—		$	947		$	53	U.S. Treasury		1		$	927		$	73		$	—		$	—		$	927		$	73
Municipal securities	Municipal securities	202		$	400,690		$	26,297		$	111,502		$	9,590		$	512,192		$	35,887	Municipal securities		207		403,086			35,397			116,482			13,561			519,568			48,958
Mortgage-backed securities:	Mortgage-backed securities:																				Mortgage-backed securities:
Residential agency	Residential agency	508		5,127,508			191,126			1,412,323			125,340			6,539,831			316,466		Residential agency		529		4,521,335			172,417			76,078			4,802			4,597,413			177,219
Residential non-agency	Residential non-agency	15		304,149			5,996			—			—			304,149			5,996		Residential non-agency		23		475,508			23,118			—			—			475,508			23,118
Commercial agency	Commercial agency	238		2,988,497			177,409			773,363			41,717			3,761,860			219,126		Commercial agency		280		2,822,610			189,150			1,188,817			99,459			4,011,427			288,609
Other debt securities	Other debt securities	1		—			—			472			28			472			28		Other debt securities		1		—			—			472			28			472			28
Total available for sale securities	Total available for sale securities	965		$	8,821,791		$	400,881		$	2,297,660		$	176,675		$	11,119,451		$	577,556	Total available for sale securities		1,041		$	8,223,466		$	420,155		$	1,381,849		$	117,850		$	9,605,315		$	538,005


		December 31, 2021																					December 31, 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:
U.S. Treasury	U.S. Treasury	1		$	1,000		$	1		$	—		$	—		$	1,000		$	1	U.S. Treasury		1		$	1,000		$	1		$	—		$	—		$	1,000		$	1
Municipal securities	Municipal securities	175		$	423,575		$	7,762		$	22,476		$	726		$	446,051		$	8,488	Municipal securities		175		423,575			7,762			22,476			726			446,051			8,488
Mortgage-backed securities:	Mortgage-backed securities:																				Mortgage-backed securities:
Residential agency	Residential agency	120		2,382,094			37,121			750,044			20,327			3,132,138			57,448		Residential agency		120		2,382,094			37,121			750,044			20,327			3,132,138			57,448

Commercial agency	Commercial agency	165		2,104,689			35,488			703,216			12,527			2,807,905			48,015		Commercial agency		165		2,104,689			35,488			703,216			12,527			2,807,905			48,015
Other debt securities	Other debt securities	1		—			—			472			28			472			28		Other debt securities		1		—			—			472			28			472			28
Total available for sale securities	Total available for sale securities	462		$	4,911,358		$	80,372		$	1,476,208		$	33,608		$	6,387,566		$	113,980	Total available for sale securities		462		$	4,911,358		$	80,372		$	1,476,208		$	33,608		$	6,387,566		$	113,980

Based on evaluations of impaired securities as of ~~March 31,~~June 30, 2022, 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.

- 5357 -

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):

March 31, 2022 December 31, 2021
Fair Value Net Unrealized Gain (Loss) Fair Value Net Unrealized Gain (Loss)
Residential agency mortgage-backed securities $ 185,003 $ (4,017) $ 43,770 $ 1,591


	June 30, 2022				December 31, 2021
	Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)

Residential agency mortgage-backed securities	$	37,927	$	(1,630)	$	43,770	$	1,591

- 5458 -

(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.

- 5559 -

The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at ~~March 31,~~June 30, 2022 (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	$	2,901,463	$	69,287	$	(6,285)	$	63,002	$	(24,595)	$	38,407	Interest rate contracts	$	2,891,638	$	97,715	$	(1,291)	$	96,424	$	(65,511)	$	30,913
Energy contracts	Energy contracts	8,010,126		2,683,519		(541,826)		2,141,693		(12,281)		2,129,412		Energy contracts	9,228,827		2,499,132		(639,879)		1,859,253		(8,390)		1,850,863
Agricultural contracts	Agricultural contracts	—		—		—		—		—		—		Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	Foreign exchange contracts	180,648		179,024		—		179,024		(715)		178,309		Foreign exchange contracts	72,169		70,120		—		70,120		(1,226)		68,894
Equity option contracts	Equity option contracts	39,984		896		—		896		(300)		596		Equity option contracts	34,545		410		—		410		(202)		208
Total customer risk management programs	Total customer risk management programs	11,132,221		2,932,726		(548,111)		2,384,615		(37,891)		2,346,724		Total customer risk management programs	12,227,179		2,667,377		(641,170)		2,026,207		(75,329)		1,950,878
Trading	Trading	29,002,117		550,075		(218,429)		331,646		(96)		331,550		Trading	23,846,052		180,773		(140,081)		40,692		—		40,692
Internal risk management programs	Internal risk management programs	200,000		1,933		—		1,933		—		1,933		Internal risk management programs	105,085		1,953		(546)		1,407		—		1,407
Total derivative contracts	Total derivative contracts	$	40,334,338	$	3,484,734	$	(766,540)	$	2,718,194	$	(37,987)	$	2,680,207	Total derivative contracts	$	36,178,316	$	2,850,103	$	(781,797)	$	2,068,306	$	(75,329)	$	1,992,977

		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	$	2,901,463	$	69,334	$	(6,285)	$	63,049	$	(61)	$	62,988	Interest rate contracts	$	2,891,638	$	97,727	$	(1,291)	$	96,436	$	(7)	$	96,429
Energy contracts	Energy contracts	8,069,893		2,712,617		(541,826)		2,170,791		(2,159,402)		11,389		Energy contracts	9,403,041		2,505,367		(639,879)		1,865,488		(1,856,520)		8,968
Agricultural contracts	Agricultural contracts	—		—		—		—		—		—		Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	Foreign exchange contracts	179,447		177,609		—		177,609		—		177,609		Foreign exchange contracts	71,531		69,228		—		69,228		—		69,228
Equity option contracts	Equity option contracts	39,984		896		—		896		—		896		Equity option contracts	34,545		410		—		410		—		410
Total customer risk management programs	Total customer risk management programs	11,190,787		2,960,456		(548,111)		2,412,345		(2,159,463)		252,882		Total customer risk management programs	12,400,755		2,672,732		(641,170)		2,031,562		(1,856,527)		175,035
Trading	Trading	26,298,226		525,699		(218,429)		307,270		(15,474)		291,796		Trading	22,713,619		179,652		(140,081)		39,571		(6,059)		33,512
Internal risk management programs	Internal risk management programs	394,216		13,156		—		13,156		—		13,156		Internal risk management programs	111,360		6,575		(546)		6,029		—		6,029
Total derivative contracts	Total derivative contracts	$	37,883,229	$	3,499,311	$	(766,540)	$	2,732,771	$	(2,174,937)	$	557,834	Total derivative contracts	$	35,225,734	$	2,858,959	$	(781,797)	$	2,077,162	$	(1,862,586)	$	214,576

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

- 5660 -

The following table summarizes the fair values of derivative contracts recorded as “derivative contracts” assets and liabilities in the balance sheet at December 31, 2021 (in thousands):


	Assets
	Notional 1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral
Customer risk management programs:
Interest rate contracts	$	2,614,162	$	53,881	$	(10,101)	$	43,780	$	—	$	43,780
Energy contracts	6,360,095		1,168,363		(375,624)		792,739		—		792,739
Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	216,272		215,148		—		215,148		—		215,148
Equity option contracts	42,136		755		—		755		(242)		513
Total customer risk management programs	9,232,665		1,438,147		(385,725)		1,052,422		(242)		1,052,180
Trading	35,592,751		139,694		(104,326)		35,368		(721)		34,647
Internal risk management programs	869,506		10,687		(217)		10,470		—		10,470
Total derivative contracts	$	45,694,922	$	1,588,528	$	(490,268)	$	1,098,260	$	(963)	$	1,097,297

	Liabilities
	Notional 1		Gross Fair Value		Netting Adjustments		Net Fair Value Before Cash Collateral		Cash Collateral		Fair Value Net of Cash Collateral
Customer risk management programs:
Interest rate contracts	$	2,614,162	$	54,062	$	(10,101)	$	43,961	$	(33,870)	$	10,091
Energy contracts	6,480,840		1,210,946		(375,624)		835,322		(803,102)		32,220
Agricultural contracts	—		—		—		—		—		—
Foreign exchange contracts	208,381		207,119		—		207,119		(447)		206,672
Equity option contracts	42,136		755		—		755		—		755
Total customer risk management programs	9,345,519		1,472,882		(385,725)		1,087,157		(837,419)		249,738
Trading	41,285,649		152,947		(104,326)		48,621		(24,074)		24,547
Internal risk management programs	298,832		1,557		(217)		1,340		—		1,340
Total derivative contracts	$	50,930,000	$	1,627,386	$	(490,268)	$	1,137,118	$	(861,493)	$	275,625

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

- 5761 -

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
		March 31, 2022				March 31, 2021					June 30, 2022				June 30, 2021
		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	$	6,342	$	—	$	1,388	$	—	Interest rate contracts	$	939	$	—	$	1,016	$	—
Energy contracts	Energy contracts	4,449		—		1,020		—		Energy contracts	12,036		—		594		—
Agricultural contracts	Agricultural contracts	—		—		18		—		Agricultural contracts	—		—		10		—
Foreign exchange contracts	Foreign exchange contracts	148		—		166		—		Foreign exchange contracts	158		—		185		—
Equity option contracts	Equity option contracts	—		—		—		—		Equity option contracts	—		—		—		—
Total customer risk management programs	Total customer risk management programs	10,939		—		2,592		—		Total customer risk management programs	13,133		—		1,805		—
Trading1	Trading1	31,074		—		(71,259)		—		Trading1	(15,376)		—		59,331		—
Internal risk management programs	Internal risk management programs	—		(46,981)		—		(27,650)		Internal risk management programs	—		(13,569)		—		18,820
Total derivative contracts	Total derivative contracts	$	42,013	$	(46,981)	$	(68,667)	$	(27,650)	Total derivative contracts	$	(2,243)	$	(13,569)	$	61,136	$	18,820

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
	June 30, 2022				June 30, 2021
	Brokerage and Trading Revenue		Gain (Loss) on Derivatives, Net		Brokerage and Trading Revenue		Gain (Loss) on Derivatives, Net
Customer risk management programs:


Interest rate contracts	7,281		—		2,404		—
Energy contracts	16,484		—		1,614		—
Agricultural contracts	—		—		28		—
Foreign exchange contracts	306		—		351		—
Equity option contracts	—		—		—		—
Total customer risk management programs	24,071		—		4,397		—
Trading1	15,698		—		(11,928)		—
Internal risk management programs	—		(60,550)		—		(8,830)
Total derivative contracts	$	39,769	$	(60,550)	$	(7,531)	$	(8,830)

- 5862 -

(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.

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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):


		March 31, 2022								December 31, 2021									June 30, 2022								December 31, 2021
		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	$	3,343,185	$	9,479,667	$	60,337	$	12,883,189	$	3,360,117	$	9,072,244	$	74,104	$	12,506,465	Commercial	$	3,410,376	$	10,113,713	$	54,608	$	13,578,697	$	3,360,117	$	9,072,244	$	74,104	$	12,506,465
Commercial real estate	Commercial real estate	924,332		3,160,635		15,989		4,100,956		929,015		2,888,048		14,262		3,831,325		Commercial real estate	874,850		3,220,359		10,939		4,106,148		929,015		2,888,048		14,262		3,831,325
Paycheck protection program	Paycheck protection program	137,365		—		—		137,365		276,341		—		—		276,341		Paycheck protection program	43,140		—		—		43,140		276,341		—		—		276,341
Loans to individuals	Loans to individuals	2,006,029		1,498,970		47,920		3,552,919		2,037,792		1,508,064		45,693		3,591,549		Loans to individuals	2,011,043		1,503,528		48,592		3,563,163		2,037,792		1,508,064		45,693		3,591,549
Total	Total	$	6,410,911	$	14,139,272	$	124,246	$	20,674,429	$	6,603,265	$	13,468,356	$	134,059	$	20,205,680	Total	$	6,339,409	$	14,837,600	$	114,139	$	21,291,148	$	6,603,265	$	13,468,356	$	134,059	$	20,205,680

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 ~~March 31,~~June 30, 2022, outstanding commitments totaled ~~$12.5~~$13.5 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 ~~March 31,~~June 30, 2022, outstanding standby letters of credit totaled ~~$654~~$701 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.

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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.

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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
		March 31, 2022										June 30, 2022
		Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Total				Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Total
Allowance for loan losses:	Allowance for loan losses:												Allowance for loan losses:
Beginning balance	Beginning balance	$	162,056	$	58,553	$	—	$	35,812	$	256,421		Beginning balance	$	151,448	$	58,974	$	—	$	36,051	$	246,473

Provision for loan losses	Provision for loan losses	(5,118)		468		—		683		(3,967)			Provision for loan losses	(15,468)		4,085		—		5,225		(6,158)
Loans charged off	Loans charged off	(6,081)		(191)		—		(1,533)		(7,805)			Loans charged off	(6)		(78)		—		(1,284)		(1,368)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	591		144		—		1,089		1,824			Recoveries of loans previously charged off	1,588		16		—		563		2,167
Ending Balance	Ending Balance	$	151,448	$	58,974	$	—	$	36,051	$	246,473		Ending Balance	$	137,562	$	62,997	$	—	$	40,555	$	241,114

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	$	13,812	$	17,442	$	—	$	1,723	$	32,977		Beginning balance	$	13,966	$	20,465	$	—	$	1,814	$	36,245

Provision for off-balance sheet credit risk	Provision for off-balance sheet credit risk	154		3,023		—		91		3,268			Provision for off-balance sheet credit risk	1,873		4,205		—		(73)		6,005
Ending Balance	Ending Balance	$	13,966	$	20,465	$	—	$	1,814	$	36,245		Ending Balance	$	15,839	$	24,670	$	—	$	1,741	$	42,250

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		Three Months Ended										Six Months Ended
		March 31, 2021										June 30, 2022
		Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Total				Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Total
Allowance for loan losses:	Allowance for loan losses:												Allowance for loan losses:
Beginning balance	Beginning balance	$	254,934	$	86,558	$	—	$	47,148	$	388,640		Beginning balance	$	162,056	$	58,553	$	—	$	35,812	$	256,421

Provision for loan losses	Provision for loan losses	(9,893)		(4,579)		—		(7,298)		(21,770)			Provision for loan losses	(20,586)		4,553		—		5,908		(10,125)
Loans charged off	Loans charged off	(15,345)		(263)		—		(1,297)		(16,905)			Loans charged off	(6,087)		(269)		—		(2,817)		(9,173)
Recoveries of loans previously charged off		1,676		30		—		731		2,437
Ending Balance		$	231,372	$	81,746	$	—	$	39,284	$	352,402
Recoveries													Recoveries	2,179		160		—		1,652		3,991
Ending balance													Ending balance	$	137,562	$	62,997	$	—	$	40,555	$	241,114

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	$	14,422	$	20,571	$	—	$	1,928	$	36,921		Beginning balance	$	13,812	$	17,442	$	—	$	1,723	$	32,977

Provision for off-balance sheet credit risk		(1,686)		(2,273)		—		(85)		(4,044)
Ending Balance		$	12,736	$	18,298	$	—	$	1,843	$	32,877
Provision for off-balance sheet credit losses													Provision for off-balance sheet credit losses	2,027		7,228		—		18		9,273
Ending balance													Ending balance	$	15,839	$	24,670	$	—	$	1,741	$	42,250



	Three Months Ended
	June 30, 2021
	Commercial		Commercial Real Estate		Paycheck Protection Program		Loans to Individuals		Total
Allowance for loan losses:
Beginning balance	$	231,372	$	81,746	$	—	$	39,284	$	352,402


Provision for loan losses	(18,442)		(10,582)		—		3,960		(25,064)
Loans charged off	(16,502)		(800)		—		(1,002)		(18,304)
Recoveries of loans previously charged off	1,875		176		—		805		2,856
Ending Balance	$	198,303	$	70,540	$	—	$	43,047	$	311,890

Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	$	12,736	$	18,298	$	—	$	1,843	$	32,877


Provision for off-balance sheet credit risk	(2,642)		(5,950)		—		2		(8,590)
Ending Balance	$	10,094	$	12,348	$	—	$	1,845	$	24,287


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


Provision for loan losses	(28,335)		(15,161)		—		(3,338)		(46,834)
Loans charged off	(31,847)		(1,063)		—		(2,299)		(35,209)
Recoveries of loans previously charged off	3,551		206		—		1,536		5,293
Ending Balance	$	198,303	$	70,540	$	—	$	43,047	$	311,890

Allowance for off-balance sheet credit risk from unfunded loan commitments:
Beginning balance	$	14,422	$	20,571	$	—	$	1,928	$	36,921


Provision for off-balance sheet credit risk	(4,328)		(8,223)		—		(83)		(12,634)
Ending Balance	$	10,094	$	12,348	$	—	$	1,845	$	24,287

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Changes in our reasonable and supportable forecasts of macroeconomic variables resulted in a ~~$7.3 million negative~~$305 thousand provision for credit losses related to lending activities during the ~~first~~second quarter of 2022. ~~Continued strength~~An increase in ~~commodity prices was partially offset by~~required provision due to loan growth and changes in our economic ~~outlook.~~outlook was offset by a sustained trend of improving credit quality metrics. Changes in the loan portfolio characteristics, including specific impairment and losses, loan balances, risk grading and changes in payment profile resulted in a ~~$6.6 million~~$458 thousand 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 ~~March 31,~~June 30, 2022 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	$	12,822,852	$	149,095	$	60,337	$	2,353	$	12,883,189	$	151,448	Commercial	$	13,524,089	$	135,209	$	54,608	$	2,353	$	13,578,697	$	137,562
Commercial real estate	Commercial real estate	4,084,967		58,039		15,989		935		4,100,956		58,974		Commercial real estate	4,095,209		62,062		10,939		935		4,106,148		62,997
Paycheck protection program	Paycheck protection program	137,365		—		—		—		137,365		—		Paycheck protection program	43,140		—		—		—		43,140		—
Loans to individuals	Loans to individuals	3,504,999		36,051		47,920		—		3,552,919		36,051		Loans to individuals	3,514,571		40,555		48,592		—		3,563,163		40,555
Total	Total	$	20,550,183	$	243,185	$	124,246	$	3,288	$	20,674,429	$	246,473	Total	$	21,177,009	$	237,826	$	114,139	$	3,288	$	21,291,148	$	241,114

The allowance for loan losses and recorded investment of the related loans by portfolio segment for each measurement method at December 31, 2021 is as follows (in thousands):


	Collectively Measured for General Allowances				Individually Measured for Specific Allowances				Total
	Recorded Investment		Related Allowance		Recorded Investment		Related Allowance		Recorded Investment		Related Allowance
Commercial	$	12,432,361	$	158,063	$	74,104	$	3,993	$	12,506,465	$	162,056
Commercial real estate	3,817,063		56,204		14,262		2,349		3,831,325		58,553
Paycheck protection program	276,341		—		—		—		276,341		—
Loans to individuals	3,545,856		35,812		45,693		—		3,591,549		35,812
Total	$	20,071,621	$	250,079	$	134,059	$	6,342	$	20,205,680	$	256,421

~~- 63 -~~

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.

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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 ~~March 31,~~June 30, 2022 by the risk grade categories and vintage (in thousands):


		Origination Year																			Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial:	Commercial:																			Commercial:
Energy	Energy																			Energy
Pass	Pass	$	102,694	$	156,167	$	48,775	$	15,678	$	11,925	$	8,450	$	2,753,419	$	—	$	3,097,108	Pass	$	109,094	$	126,603	$	34,298	$	14,287	$	7,490	$	8,606	$	3,027,640	$	6,661	$	3,334,679
Special Mention		—		551		642		—		—		—		1,090		—		2,283

Accruing Substandard	Accruing Substandard	—		—		—		1,139		693		705		60,863		9,900		73,300		Accruing Substandard	—		—		—		1,093		501		695		25,655		9,525		37,469
Nonaccrual	Nonaccrual	—		—		19,404		—		—		602		4,970		—		24,976		Nonaccrual	—		—		16,310		—		—		472		4,142		—		20,924
Total energy	Total energy	102,694		156,718		68,821		16,817		12,618		9,757		2,820,342		9,900		3,197,667		Total energy	109,094		126,603		50,608		15,380		7,991		9,773		3,057,437		16,186		3,393,072

Healthcare	Healthcare																			Healthcare
Pass	Pass	140,071		574,892		549,379		514,779		483,909		933,344		168,255		24		3,364,653		Pass	516,924		607,642		533,637		504,011		462,368		839,735		174,439		24		3,638,780
Special Mention	Special Mention	—		6,787		—		15,417		—		5,712		5		—		27,921		Special Mention	—		—		—		9,515		—		—		5		—		9,520
Accruing Substandard	Accruing Substandard	—		—		—		26,973		—		7,109		—		—		34,082		Accruing Substandard	—		—		—		26,816		—		6,962		—		—		33,778
Nonaccrual	Nonaccrual	—		—		—		—		6,542		8,534		—		—		15,076		Nonaccrual	—		—		—		—		6,533		8,352		—		—		14,885
Total healthcare	Total healthcare	140,071		581,679		549,379		557,169		490,451		954,699		168,260		24		3,441,732		Total healthcare	516,924		607,642		533,637		540,342		468,901		855,049		174,444		24		3,696,963

Services	Services																			Services
Pass	Pass	54,992		634,506		361,724		266,054		246,336		933,399		779,824		567		3,277,402		Pass	307,329		604,668		324,439		245,344		187,252		892,138		778,201		746		3,340,117
Special Mention	Special Mention	—		415		6,326		1,989		1,006		95		22,419		182		32,432		Special Mention	330		432		410		822		985		86		21,900		168		25,133
Accruing Substandard	Accruing Substandard	—		10		499		4,002		10,579		2,990		7,046		—		25,126		Accruing Substandard	—		—		384		3,837		57		2,909		33,797		—		40,984
Nonaccrual	Nonaccrual	—		—		—		—		—		16,145		390		—		16,535		Nonaccrual	—		—		234		—		—		14,899		126		—		15,259
Total services	Total services	54,992		634,931		368,549		272,045		257,921		952,629		809,679		749		3,351,495		Total services	307,659		605,100		325,467		250,003		188,294		910,032		834,024		914		3,421,493

General business	General business																			General business
Pass	Pass	209,407		547,777		220,861		250,546		167,570		356,548		1,102,054		1,981		2,856,744		Pass	416,644		480,471		199,287		219,367		162,518		309,630		1,234,314		1,885		3,024,116
Special Mention	Special Mention	—		—		137		—		1,374		2,975		8,100		—		12,586		Special Mention	—		937		—		9,355		29		6,137		8,446		—		24,904
Accruing Substandard	Accruing Substandard	—		215		957		1,139		5,673		9,231		2,000		—		19,215		Accruing Substandard	—		—		115		605		4,743		9,028		119		—		14,610
Nonaccrual	Nonaccrual	—		—		1,111		799		1,004		24		800		12		3,750		Nonaccrual	—		—		1,093		736		979		16		709		6		3,539
Total general business	Total general business	209,407		547,992		223,066		252,484		175,621		368,778		1,112,954		1,993		2,892,295		Total general business	416,644		481,408		200,495		230,063		168,269		324,811		1,243,588		1,891		3,067,169

Total commercial	Total commercial	507,164		1,921,320		1,209,815		1,098,515		936,611		2,285,863		4,911,235		12,666		12,883,189		Total commercial	1,350,321		1,820,753		1,110,207		1,035,788		833,455		2,099,665		5,309,493		19,015		13,578,697

Commercial real estate:	Commercial real estate:																			Commercial real estate:
Pass	Pass	279,254		921,473		695,399		826,150		398,633		820,481		107,780		25		4,049,195		Pass	450,221		1,084,348		633,124		747,272		310,651		736,285		112,717		—		4,074,618
Special Mention	Special Mention	—		—		—		—		—		18,942		—		—		18,942		Special Mention	—		—		—		—		—		17,478		—		—		17,478
Accruing Substandard	Accruing Substandard	—		—		—		—		13,501		3,329		—		—		16,830		Accruing Substandard	—		—		—		—		—		3,113		—		—		3,113
Nonaccrual	Nonaccrual	—		—		—		7,908		—		8,081		—		—		15,989		Nonaccrual	—		—		—		7,739		—		3,200		—		—		10,939
Total commercial real estate	Total commercial real estate	279,254		921,473		695,399		834,058		412,134		850,833		107,780		25		4,100,956		Total commercial real estate	450,221		1,084,348		633,124		755,011		310,651		760,076		112,717		—		4,106,148

- 6570 -


		Origination Year																			Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Paycheck protection program:	Paycheck protection program:																			Paycheck protection program:
Pass	Pass	—		113,697		23,668		—		—		—		—		—		137,365		Pass	—		30,389		12,751		—		—		—		—		—		43,140
Total paycheck protection program	Total paycheck protection program	—		113,697		23,668		—		—		—		—		—		137,365		Total paycheck protection program	—		30,389		12,751		—		—		—		—		—		43,140
Loans to individuals:	Loans to individuals:																			Loans to individuals:
Residential mortgage	Residential mortgage																			Residential mortgage
Pass	Pass	77,813		393,077		427,965		70,900		48,809		330,626		320,350		21,887		1,691,427		Pass	181,189		386,210		410,339		70,161		43,769		297,196		341,992		22,409		1,753,265
Special Mention	Special Mention	—		35		—		17		145		284		552		210		1,243		Special Mention	—		60		—		17		166		329		238		—		810
Accruing Substandard	Accruing Substandard	—		—		—		—		—		53		26		—		79		Accruing Substandard	—		—		—		34		—		131		29		—		194
Nonaccrual	Nonaccrual	35		1,517		2,571		356		2,057		21,653		1,903		665		30,757		Nonaccrual	34		1,509		2,519		356		1,995		21,180		2,059		808		30,460
Total residential mortgage	Total residential mortgage	77,848		394,629		430,536		71,273		51,011		352,616		322,831		22,762		1,723,506		Total residential mortgage	181,223		387,779		412,858		70,568		45,930		318,836		344,318		23,217		1,784,729

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	—		1,080		11,379		15,778		23,480		253,872		—		—		305,589		Pass	—		2,218		10,722		14,035		21,325		227,538		—		—		275,838

Nonaccrual	Nonaccrual	—		—		—		2,081		1,746		13,165		—		—		16,992		Nonaccrual	—		—		431		2,087		2,295		13,187		—		—		18,000
Total residential mortgage guaranteed by U.S. government agencies	Total residential mortgage guaranteed by U.S. government agencies	—		1,080		11,379		17,859		25,226		267,037		—		—		322,581		Total residential mortgage guaranteed by U.S. government agencies	—		2,218		11,153		16,122		23,620		240,725		—		—		293,838

Personal:	Personal:																			Personal:
Pass	Pass	40,789		219,748		171,964		174,523		70,349		214,736		613,114		598		1,505,821		Pass	90,206		215,139		170,635		172,046		70,564		211,023		553,611		486		1,483,710
Special Mention	Special Mention	—		49		23		—		15		42		15		—		144		Special Mention	5		34		43		6		16		46		—		—		150
Accruing Substandard	Accruing Substandard	—		524		—		165		—		—		7		—		696		Accruing Substandard	8		433		—		160		—		—		3		—		604
Nonaccrual	Nonaccrual	—		14		19		10		22		42		64		—		171		Nonaccrual	—		31		17		26		11		23		24		—		132
Total personal	Total personal	40,789		220,335		172,006		174,698		70,386		214,820		613,200		598		1,506,832		Total personal	90,219		215,637		170,695		172,238		70,591		211,092		553,638		486		1,484,596

Total loans to individuals	Total loans to individuals	118,637		616,044		613,921		263,830		146,623		834,473		936,031		23,360		3,552,919		Total loans to individuals	271,442		605,634		594,706		258,928		140,141		770,653		897,956		23,703		3,563,163
Total loans	Total loans	$	905,055	$	3,572,534	$	2,542,803	$	2,196,403	$	1,495,368	$	3,971,169	$	5,955,046	$	36,051	$	20,674,429	Total loans	$	2,071,984	$	3,541,124	$	2,350,788	$	2,049,727	$	1,284,247	$	3,630,394	$	6,320,166	$	42,718	$	21,291,148

- 6671 -

The following table summarizes the Company’s loan portfolio at December 31, 2021 by the risk grade categories and vintage (in thousands):


	Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial:
Energy
Pass	$	252,133	$	29,556	$	15,914	$	13,548	$	4,741	$	6,765	$	2,540,525	$	—	$	2,863,182
Special Mention	558		771		—		—		—		—		750		—		2,079
Accruing Substandard	10,650		22,611		1,185		814		—		716		74,556		—		110,532
Nonaccrual	—		20,487		—		—		—		714		9,890		—		31,091
Total energy	263,341		73,425		17,099		14,362		4,741		8,195		2,625,721		—		3,006,884



Healthcare
Pass	563,800		589,193		516,558		498,998		319,096		688,136		160,154		26		3,335,961
Special Mention	6,835		—		15,583		—		11,135		—		5		—		33,558
Accruing Substandard	—		—		27,135		543		—		1,981		—		—		29,659
Nonaccrual	—		—		—		6,542		—		8,711		509		—		15,762
Total healthcare	570,635		589,193		559,276		506,083		330,231		698,828		160,668		26		3,414,940



Services
Pass	696,149		405,057		289,375		275,010		225,404		795,029		607,958		375		3,294,357
Special Mention	434		405		1,830		1,047		3,290		47		17,210		192		24,455
Accruing Substandard	43		530		4,166		10,714		1,785		2,366		11,607		—		31,211
Nonaccrual	—		—		—		230		13,918		2,519		503		—		17,170
Total services	696,626		405,992		295,371		287,001		244,397		799,961		637,278		567		3,367,193



General business
Pass	584,438		211,892		264,462		177,384		168,977		215,014		1,047,420		2,284		2,671,871
Special Mention	218		223		60		1,435		3,842		—		5,875		—		11,653
Accruing Substandard	265		1,066		1,634		7,697		8,336		3,024		1,821		—		23,843
Nonaccrual	—		2,444		4,562		1,046		762		518		730		19		10,081
Total general business	584,921		215,625		270,718		187,562		181,917		218,556		1,055,846		2,303		2,717,448



Total commercial	2,115,523		1,284,235		1,142,464		995,008		761,286		1,725,540		4,479,513		2,896		12,506,465

Commercial real estate:
Pass	717,400		711,231		871,283		403,115		279,058		664,684		117,847		31		3,764,649
Special Mention	—		—		—		6,660		10,898		9,244		—		—		26,802
Accruing Substandard	—		—		—		13,352		4,480		7,780		—		—		25,612
Nonaccrual	—		—		8,076		—		—		6,186		—		—		14,262
Total commercial real estate	717,400		711,231		879,359		423,127		294,436		687,894		117,847		31		3,831,325

- 6772 -


	Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Paycheck protection program:
Pass	237,357		38,984		—		—		—		—		—		—		276,341
Total paycheck protection program	237,357		38,984		—		—		—		—		—		—		276,341
Loans to individuals:
Residential mortgage
Pass	386,092		452,537		84,001		60,390		68,150		295,632		320,638		21,463		1,688,903
Special Mention	—		—		156		—		19		411		282		159		1,027
Accruing Substandard	98		—		—		—		127		41		400		—		666
Nonaccrual	1,516		1,809		383		1,968		629		22,289		2,177		803		31,574
Total residential mortgage	387,706		454,346		84,540		62,358		68,925		318,373		323,497		22,425		1,722,170



Residential mortgage guaranteed by U.S. government agencies
Pass	699		11,380		20,650		27,970		32,742		246,871		—		—		340,312


Nonaccrual	—		—		1,259		821		635		11,146		—		—		13,861
Total residential mortgage guaranteed by U.S. government agencies	699		11,380		21,909		28,791		33,377		258,017		—		—		354,173



Personal:
Pass	218,960		180,577		177,389		70,249		92,592		135,041		638,713		728		1,514,249
Special Mention	—		9		34		3		—		47		—		—		93
Accruing Substandard	435		5		165		—		—		1		—		—		606
Nonaccrual	110		14		10		24		35		40		25		—		258
Total personal	219,505		180,605		177,598		70,276		92,627		135,129		638,738		728		1,515,206



Total loans to individuals	607,910		646,331		284,047		161,425		194,929		711,519		962,235		23,153		3,591,549
Total loans	$	3,678,190	$	2,680,781	$	2,305,870	$	1,579,560	$	1,250,651	$	3,124,953	$	5,559,595	$	26,080	$	20,205,680

- 6873 -

Nonaccruing Loans

A summary of nonaccruing loans at ~~March 31,~~June 30, 2022 follows (in thousands):


		As of March 31, 2022									As of June 30, 2022
		Total		With No Allowance		With Allowance		Related Allowance			Total		With No Allowance		With Allowance		Related Allowance
Commercial:	Commercial:									Commercial:
Energy	Energy	$	24,976	$	24,976	$	—	$	—	Energy	$	20,924	$	20,924	$	—	$	—
Healthcare	Healthcare	15,076		8,534		6,542		946		Healthcare	14,886		8,353		6,533		946
Services	Services	16,535		13,290		3,245		1,407		Services	15,259		11,798		3,461		1,407
General business	General business	3,750		3,750		—		—		General business	3,539		3,539		—		—
Total commercial	Total commercial	60,337		50,550		9,787		2,353		Total commercial	54,608		44,614		9,994		2,353

Commercial real estate	Commercial real estate	15,989		8,081		7,908		935		Commercial real estate	10,939		3,200		7,739		935

Loans to individuals:	Loans to individuals:									Loans to individuals:
Residential mortgage	Residential mortgage	30,757		30,757		—		—		Residential mortgage	30,460		30,460		—		—
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	16,992		16,992		—		—		Residential mortgage guaranteed by U.S. government agencies	18,000		18,000		—		—
Personal	Personal	171		171		—		—		Personal	132		132		—		—
Total loans to individuals	Total loans to individuals	47,920		47,920		—		—		Total loans to individuals	48,592		48,592		—		—

Total	Total	$	124,246	$	106,551	$	17,695	$	3,288	Total	$	114,139	$	96,406	$	17,733	$	3,288

A summary of nonaccruing loans at December 31, 2021 follows (in thousands):


	As of December 31, 2021
	Total		With No Allowance		With Allowance		Related Allowance
Commercial:
Energy	$	31,091	$	31,091	$	—	$	—
Healthcare	15,762		9,679		6,083		53
Services	17,170		13,686		3,484		2,584
General business	10,081		7,690		2,391		1,357
Total commercial	74,104		62,146		11,958		3,994

Commercial real estate	14,262		6,186		8,076		2,349

Loans to individuals:
Residential mortgage	31,574		31,574		—		—
Residential mortgage guaranteed by U.S. government agencies	13,861		13,861		—		—
Personal	258		258		—		—
Total loans to individuals	45,693		45,693		—		—

Total	$	134,059	$	114,025	$	20,034	$	6,343

- 6974 -

Troubled Debt Restructurings

At ~~March 31,~~June 30, 2022 the Company had ~~$260~~$252 million in troubled debt restructurings ("TDRs"), of which ~~$204~~$196 million were accruing residential mortgage loans guaranteed by U.S. government agencies, $20 million were nonaccruing residential mortgage loans with no specific allowance necessary and ~~$12~~$11 million were nonaccruing commercial real estate loans with a related specific allowance of $935 thousand. Of the approximately ~~$124~~$129 million of TDRs that are performing in accordance with the modified terms, ~~$92~~$97 million are government guaranteed loans.

At December 31, 2021, the Company had $273 million in TDRs, of which $211 million were accruing residential mortgage loans guaranteed by U.S. government agencies. Of the approximately $141 million of TDRs that were performing in accordance with the modified terms, $97 million are government guaranteed loans.

TDRs generally consist of interest rate concessions, payment stream concessions or a combination of concessions to distressed borrowers. During the three and six months ended ~~March 31,~~June 30, 2022, ~~$18~~$10 million and $28 million of loans were restructured and $3$1 thousand and $4 thousand of loans designated as TDRs were charged off. During the three and six months ended ~~March 31,~~June 30, 2021, ~~$13~~$55 million and $66 million of loans were restructured and ~~$306~~$35 thousand and $311 thousand 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 ~~March 31,~~June 30, 2022 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	$	3,197,667	$	—	$	—	$	—	$	3,197,667	$	—	Energy	$	3,393,072	$	—	$	—	$	—	$	3,393,072	$	—
Healthcare	Healthcare	3,433,749		1,300		141		6,542		3,441,732		—		Healthcare	3,688,256		2,178		—		6,529		3,696,963		—
Services	Services	3,340,989		743		1,377		8,386		3,351,495		—		Services	3,413,226		198		—		8,069		3,421,493		—
General business	General business	2,891,472		691		—		132		2,892,295		—		General business	3,065,236		489		1,444		—		3,067,169		—
Total commercial	Total commercial	12,863,877		2,734		1,518		15,060		12,883,189		—		Total commercial	13,559,790		2,865		1,444		14,598		13,578,697		—

Commercial real estate	Commercial real estate	4,089,135		4,473		4,270		3,078		4,100,956		—		Commercial real estate	4,102,920		28		—		3,200		4,106,148		—

Paycheck protection program	Paycheck protection program	137,052		—		6		307		137,365		307		Paycheck protection program	42,651		27		459		3		43,140		3

Loans to individuals:	Loans to individuals:													Loans to individuals:
Residential mortgage	Residential mortgage	1,707,772		9,334		364		6,036		1,723,506		—		Residential mortgage	1,766,354		10,904		1,828		5,643		1,784,729		—
Residential mortgage guaranteed by U.S. government agencies	Residential mortgage guaranteed by U.S. government agencies	147,883		51,165		—		123,533		322,581		109,283		Residential mortgage guaranteed by U.S. government agencies	138,675		35,574		19,659		99,930		293,838		87,470
Personal	Personal	1,506,538		114		107		73		1,506,832		—		Personal	1,482,287		671		1,615		23		1,484,596		—
Total loans to individuals	Total loans to individuals	3,362,193		60,613		471		129,642		3,552,919		109,283		Total loans to individuals	3,387,316		47,149		23,102		105,596		3,563,163		87,470

Total	Total	$	20,452,257	$	67,820	$	6,265	$	148,087	$	20,674,429	$	109,590	Total	$	21,092,677	$	50,069	$	25,005	$	123,397	$	21,291,148	$	87,473

- 7075 -

A summary of loans currently performing and past due as of December 31, 2021 is as follows (in thousands):


			Past Due								Past Due 90 Days or More and Accruing
	Current		30 to 59 Days		60 to 89 Days		90 Days or More		Total
Commercial:
Energy	$	3,002,623	$	545	$	3,716	$	—	$	3,006,884	$	—
Healthcare	3,412,072		2,359		—		509		3,414,940		—
Services	3,352,639		920		4,620		9,014		3,367,193		—
General business	2,705,596		6,080		997		4,775		2,717,448		199
Total commercial	12,472,930		9,904		9,333		14,298		12,506,465		199

Commercial real estate	3,827,962		—		206		3,157		3,831,325		—

Paycheck protection program	276,341		—		—		—		276,341		74

Loans to individuals:
Residential mortgage	1,707,654		6,263		1,556		6,697		1,722,170		—
Residential mortgage guaranteed by U.S. government agencies	181,022		26,869		16,751		129,531		354,173		118,819
Personal	1,514,938		66		24		178		1,515,206		40
Total loans to individuals	3,403,614		33,198		18,331		136,406		3,591,549		118,859

Total	$	19,980,847	$	43,102	$	27,870	$	153,861	$	20,205,680	$	119,132

- 7176 -

(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):


		March 31, 2022				December 31, 2021					June 30, 2022				December 31, 2021
		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	$	161,717	$	159,355	$	182,710	$	186,175	Residential mortgage loans held for sale	$	178,631	$	178,576	$	182,710	$	186,175
Residential mortgage loan commitments	Residential mortgage loan commitments	160,260		2,869		171,412		6,167		Residential mortgage loan commitments	106,004		3,867		171,412		6,167
Forward sales contracts	Forward sales contracts	310,237		7,250		328,433		(47)		Forward sales contracts	267,880		283		328,433		(47)
				$	169,474			$	192,295				$	182,726			$	192,295

No residential mortgage loans held for sale were 90 days or more past due or considered impaired as of ~~March 31,~~June 30, 2022 or December 31, 2021. No credit losses were recognized on residential mortgage loans held for sale for the ~~three~~six month period ended ~~March 31,~~June 30, 2022 and 2021.

Mortgage banking revenue was as follows (in thousands):


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021				2022		2021		2022		2021
Production revenue:	Production revenue:						Production revenue:
Net realized gains on sale of mortgage loans	Net realized gains on sale of mortgage loans	$	6,883	$	26,000		Net realized gains on sale of mortgage loans	$	3,158	$	20,783	$	10,041	$	46,783
Net change in unrealized gain (loss) on mortgage loans held for sale	Net change in unrealized gain (loss) on mortgage loans held for sale	(5,827)		(6,955)			Net change in unrealized gain (loss) on mortgage loans held for sale	2,307		1,783		(3,520)		(5,172)
Net change in the fair value of mortgage loan commitments	Net change in the fair value of mortgage loan commitments	(3,298)		(8,980)			Net change in the fair value of mortgage loan commitments	998		(1,253)		(2,300)		(10,233)
Net change in the fair value of forward sales contracts	Net change in the fair value of forward sales contracts	7,297		15,222			Net change in the fair value of forward sales contracts	(6,967)		(11,309)		330		3,913
Total production revenue	Total production revenue	5,055		25,287			Total production revenue	(504)		10,004		4,551		35,291
Servicing revenue	Servicing revenue	11,595		11,826			Servicing revenue	11,872		11,215		23,467		23,041
Total mortgage banking revenue	Total mortgage banking revenue	$	16,650	$	37,113		Total mortgage banking revenue	$	11,368	$	21,219	$	28,018	$	58,332

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.

- 7277 -

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):


		March 31, 2022			December 31, 2021				June 30, 2022			December 31, 2021
Number of residential mortgage loans serviced for others	Number of residential mortgage loans serviced for others	99,409			102,008			Number of residential mortgage loans serviced for others	113,217			102,008
Outstanding principal balance of residential mortgage loans serviced for others	Outstanding principal balance of residential mortgage loans serviced for others	$	16,024,663		$	16,442,446		Outstanding principal balance of residential mortgage loans serviced for others	$	19,327,944		$	16,442,446
Weighted average interest rate	Weighted average interest rate	3.57		%	3.58		%	Weighted average interest rate	3.52		%	3.58		%
Remaining term (in months)	Remaining term (in months)	281			281			Remaining term (in months)	285			281

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


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021				2022		2021		2022		2021
Beginning Balance	Beginning Balance	$	163,198	$	101,172		Beginning Balance	$	209,563	$	132,915	$	163,198	$	101,172
Additions	Additions	5,215		9,830			Additions	5,754		7,937		10,969		17,767
Acquisitions							Acquisitions	44,867		—		44,867		—

Change in fair value due to principal payments	Change in fair value due to principal payments	(7,960)		(11,961)			Change in fair value due to principal payments	(7,357)		(10,182)		(15,317)		(22,143)
Change in fair value due to market assumption changes	Change in fair value due to market assumption changes	49,110		33,874			Change in fair value due to market assumption changes	17,485		(13,041)		66,595		20,833
Ending Balance	Ending Balance	$	209,563	$	132,915		Ending Balance	$	270,312	$	117,629	$	270,312	$	117,629

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:


		March 31, 2022	December 31, 2021		June 30, 2022	December 31, 2021
Discount rate – risk-free rate plus a market premium	Discount rate – risk-free rate plus a market premium	8.53%	8.39%	Discount rate – risk-free rate plus a market premium	8.77%	8.39%
Prepayment rate - based upon loan interest rate, original term and loan type	Prepayment rate - based upon loan interest rate, original term and loan type	8.48%	12.11%	Prepayment rate - based upon loan interest rate, original term and loan type	7.88%	12.11%
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 - $94	$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	2.47%	1.32%	Escrow earnings rate – indexed to rates paid on deposit accounts with comparable average life	3.05%	1.32%
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	2.28%	2.05%	Delinquency rate	1.87%	2.05%

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.

- 7378 -

(6) Commitments and Contingent Liabilities

Litigation Contingencies

On June 24, 2015, BOKF, NA received a complaint 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. 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 August 26, 2016, BOKF, NA was sued in the United States District Court for New Jersey by 2 bondholders in a putative class action alleging BOKF, NA participated in the fraudulent sale of securities by the principals. The 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 is pending on~~recently granted in part and denied in part BOKF, NA’s motion to dismiss the ~~plaintiff's~~plaintiffs’ Third Amended ~~Petition.~~Petition and BOKF is preparing to respond. Management is advised by counsel that, in the Tulsa County District Court action, a loss is not probable and that the loss, if any, cannot be reasonably estimated.

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. On January 8, 2020, the 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. The SEC continues to aggressively pursue collection of the judgment. If the individual principal and his wife cannot pay the bonds, 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.

~~The~~As previously reported, the United States Courts of Appeals for the Fifth and the Tenth Circuits have each affirmed dismissals of putative class actions in which the plaintiffs alleged that an extended overdraft fee charged by BOKF, NA was impermissible interest. ~~Before the Tenth Circuit affirmed the dismissal~~The time within which any appeals of ~~the second putative class action, the plaintiff in the Fifth Circuit case~~such dismissals may be filed an application in the Supreme Court of the United States for an extension of time to file a petition for certiorari, citing the possibility of a split in the Circuit Courts due to the pendency of the Tenth Circuit Appeal. The Supreme Court granted the extension, as it routinely does,has expired and the ~~extension will expire June 12, 2022. Management has been advised by its counsel that, if a petition is filed, the grant of certiorari by the Supreme Court is unlikely.~~actions successfully concluded.

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 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~~District Court for the Northern District of Oklahoma denied the defendants' motion to ~~dismiss.~~dismiss and the action is proceeding. 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 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 and made the same allegations in the 2009 probate hearing as they now make in the 2019 Colorado District Court action. In 2009, the Colorado Probate Court entered summary judgment against the beneficiaries and the estate was closed. The 2019 action is pending on BOKF’s renewed motions for summary judgment. Management is advised by counsel that a loss is not probable and that the loss, if any, cannot be reasonably estimated.

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.

- 7479 -

At ~~March 31,~~June 30, 2022, the Company has ~~$360~~$374 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 ~~$101~~$92 million of unfunded commitments included in Other liabilities on the Consolidated Balance Sheets.

(7) Shareholders' Equity

On ~~May 3,~~August 2, 2022, the Company declared a quarterly cash dividend of $0.53 per common share payable on or about ~~May~~August 25, 2022 to shareholders of record as of ~~May 10,~~August 16, 2022.

Dividends declared were $0.53 and $1.06 per share during the three and six months ended ~~March 31,~~June 30, 2022 and $0.52 and $1.04 per share during the three and six months ended ~~March 31,~~June 30, 2021.

Accumulated Other Comprehensive Income (Loss)

AOCI includes unrealized gains and losses on available for sale ("AFS") ~~securities and non-credit related~~securities. AOCI also includes unrealized losses on AFS securities ~~for which~~that were transferred from AFS to investment securities in the second quarter of 2022. Such amounts are being amortized over the estimated remaining life of the security as an ~~other-than-temporary impairment has been recorded in earnings.~~adjustment to yield, offsetting the related amortization of premium on the transferred securities. 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		Investment Securities Transferred from AFS		Employee Benefit Plans		Total
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)	(150,131)		—		(150,131)		Net change in unrealized gain (loss)	(141,651)		—		—		(141,651)
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	(467)		—		(467)		Gain on available for sale securities, net	(1,897)		—		—		(1,897)
Other comprehensive income, before income taxes		(150,598)		—		(150,598)
Other comprehensive loss, before income taxes								Other comprehensive loss, before income taxes	(143,548)		—		—		(143,548)
Federal and state income taxes	Federal and state income taxes	(36,139)		—		(36,139)		Federal and state income taxes	(34,448)		—		—		(34,448)
Other comprehensive income, net of income taxes		(114,459)		—		(114,459)
Balance, March 31, 2021		$	220,573	$	836	$	221,409
Other comprehensive loss, net of income taxes								Other comprehensive loss, net of income taxes	(109,100)		—		—		(109,100)
Balance, June 30, 2021								Balance, June 30, 2021	$	225,932	$	—	$	836	$	226,768

Balance, Dec. 31, 2021	Balance, Dec. 31, 2021	$	69,775	$	2,596	$	72,371	Balance, Dec. 31, 2021	$	69,775	$	—	$	2,596	$	72,371
Net change in unrealized gain (loss)	Net change in unrealized gain (loss)	(639,041)		—		(639,041)		Net change in unrealized gain (loss)	(881,577)		—		—		(881,577)
Transfer of net unrealized loss from AFS to investment securities								Transfer of net unrealized loss from AFS to investment securities	267,509		(267,509)		—		—
Reclassification adjustments included in earnings:	Reclassification adjustments included in earnings:							Reclassification adjustments included in earnings:
Interest revenue, Investment securities								Interest revenue, Investment securities	—		2,455		—		2,455
Gain on available for sale securities, net	Gain on available for sale securities, net	(937)		—		(937)		Gain on available for sale securities, net	(2,125)		—		—		(2,125)
Other comprehensive income, before income taxes		(639,978)		—		(639,978)
Other comprehensive loss, before income taxes								Other comprehensive loss, before income taxes	(616,193)		(265,054)		—		(881,247)
Federal and state income taxes	Federal and state income taxes	(149,781)		—		(149,781)		Federal and state income taxes	(144,215)		(62,033)		—		(206,248)
Other comprehensive income (loss), net of income taxes		(490,197)		—		(490,197)
Balance, March 31, 2022		$	(420,422)	$	2,596	$	(417,826)
Other comprehensive loss, net of income taxes								Other comprehensive loss, net of income taxes	(471,978)		(203,021)		—		(674,999)
Balance, June 30, 2022								Balance, June 30, 2022	$	(402,203)	$	(203,021)	$	2,596	$	(602,628)

- 7580 -

(8) Earnings Per Share


(In thousands, except share and per share amounts)	(In thousands, except share and per share amounts)	Three Months Ended March 31,				(In thousands, except share and per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021					2022		2021		2022		2021
Numerator:	Numerator:							Numerator:
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders	$	62,488	$	146,060			Net income attributable to BOK Financial Corp. shareholders	$	132,846	$	166,421	$	195,334	$	312,481
Less: Earnings allocated to participating securities	Less: Earnings allocated to participating securities	451		937				Less: Earnings allocated to participating securities	949		1,170		1,400		2,107
Numerator for basic earnings per share – income available to common shareholders	Numerator for basic earnings per share – income available to common shareholders	62,037		145,123				Numerator for basic earnings per share – income available to common shareholders	131,897		165,251		193,934		310,374
Effect of reallocating undistributed earnings of participating securities	Effect of reallocating undistributed earnings of participating securities	—		—				Effect of reallocating undistributed earnings of participating securities	—		1		—		—
Numerator for diluted earnings per share – income available to common shareholders	Numerator for diluted earnings per share – income available to common shareholders	$	62,037	$	145,123			Numerator for diluted earnings per share – income available to common shareholders	$	131,897	$	165,252	$	193,934	$	310,374

Denominator:	Denominator:							Denominator:
Weighted average shares outstanding	Weighted average shares outstanding	68,306,107		69,583,788				Weighted average shares outstanding	67,938,607		69,302,245		68,105,679		69,442,239
Less: Participating securities included in weighted average shares outstanding	Less: Participating securities included in weighted average shares outstanding	493,707		446,413				Less: Participating securities included in weighted average shares outstanding	484,859		486,579		489,283		466,496
Denominator for basic earnings per common share	Denominator for basic earnings per common share	67,812,400		69,137,375				Denominator for basic earnings per common share	67,453,748		68,815,666		67,616,396		68,975,743
Dilutive effect of employee stock compensation plans	Dilutive effect of employee stock compensation plans	1,451		4,335				Dilutive effect of employee stock compensation plans	1,424		1,776		1,438		3,055
Denominator for diluted earnings per common share	Denominator for diluted earnings per common share	67,813,851		69,141,710				Denominator for diluted earnings per common share	67,455,172		68,817,442		67,617,834		68,978,798

Basic earnings per share	Basic earnings per share	$	0.91	$	2.10			Basic earnings per share	$	1.96	$	2.40	$	2.87	$	4.50
Diluted earnings per share	Diluted earnings per share	$	0.91	$	2.10			Diluted earnings per share	$	1.96	$	2.40	$	2.87	$	4.50

- 7681 -

(9) Reportable Segments

Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended ~~March 31,~~June 30, 2022 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	$	147,590	$	16,915	$	56,231	$	47,675	$	268,411	Net interest revenue from external sources	$	172,974	$	16,784	$	39,412	$	44,848	$	274,018
Net interest revenue (expense) from internal sources	Net interest revenue (expense) from internal sources	(10,579)		10,292		(465)		752		—		Net interest revenue (expense) from internal sources	(6,452)		17,002		(1,665)		(8,885)		—
Net interest revenue	Net interest revenue	137,011		27,207		55,766		48,427		268,411		Net interest revenue	166,522		33,786		37,747		35,963		274,018
Net loans charged off and provision for credit losses	Net loans charged off and provision for credit losses	5,343		1,112		(71)		(6,384)		—		Net loans charged off and provision for credit losses	(1,502)		1,196		(60)		366		—
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	131,668		26,095		55,837		54,811		268,411		Net interest revenue after provision for credit losses	168,024		32,590		37,807		35,597		274,018
Other operating revenue	Other operating revenue	57,427		33,961		25,018		(28,550)		87,856		Other operating revenue	61,688		30,089		86,761		(9,921)		168,617
Other operating expense	Other operating expense	65,114		48,789		74,495		89,220		277,618		Other operating expense	70,009		52,660		76,393		74,593		273,655
Net direct contribution	Net direct contribution	123,981		11,267		6,360		(62,959)		78,649		Net direct contribution	159,703		10,019		48,175		(48,917)		168,980
Gain (loss) on financial instruments, net	Gain (loss) on financial instruments, net	(204)		(57,895)		—		58,099		—		Gain (loss) on financial instruments, net	61		(15,860)		—		15,799		—
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	—		49,110		—		(49,110)		—		Change in fair value of mortgage servicing rights	—		17,485		—		(17,485)		—
Gain (loss) on repossessed assets, net	Gain (loss) on repossessed assets, net	1,793		45		—		(1,838)		—		Gain (loss) on repossessed assets, net	(4,515)		93		—		4,422		—
Corporate expense allocations	Corporate expense allocations	16,246		12,080		12,062		(40,388)		—		Corporate expense allocations	16,634		10,120		12,503		(39,257)		—
Net income before taxes		109,324		(9,553)		(5,702)		(15,420)		78,649
Net income (loss) before taxes												Net income (loss) before taxes	138,615		1,617		35,672		(6,924)		168,980
Federal and state income taxes	Federal and state income taxes	26,980		(2,236)		(1,283)		(7,264)		16,197		Federal and state income taxes	33,818		378		8,385		(6,459)		36,122
Net income (loss)	Net income (loss)	82,344		(7,317)		(4,419)		(8,156)		62,452		Net income (loss)	104,797		1,239		27,287		(465)		132,858
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	—		—		—		(36)		(36)		Net income (loss) attributable to non-controlling interests	—		—		—		12		12
Net income (loss) attributable to BOK Financial Corp. shareholders	Net income (loss) attributable to BOK Financial Corp. shareholders	$	82,344	$	(7,317)	$	(4,419)	$	(8,120)	$	62,488	Net income (loss) attributable to BOK Financial Corp. shareholders	$	104,797	$	1,239	$	27,287	$	(477)	$	132,846

Average assets	Average assets	$	29,823,905	$	10,273,890	$	21,323,795	$	(10,860,516)	$	50,561,074	Average assets	$	29,269,712	$	10,338,191	$	16,902,721	$	(9,222,090)	$	47,288,534

- 82 -

Reportable segments reconciliation to the Consolidated Financial Statements for the six months ended June 30, 2022 is as follows (in thousands):



	Commercial		Consumer		Wealth Management		Funds Management and Other		BOK Financial Consolidated
Net interest revenue from external sources	$	320,564	$	33,699	$	95,643	$	92,523	$	542,429
Net interest revenue (expense) from internal sources	(17,031)		27,294		(2,130)		(8,133)		—
Net interest revenue	303,533		60,993		93,513		84,390		542,429
Provision for credit losses	3,841		2,308		(131)		(6,018)		—
Net interest revenue after provision for credit losses	299,692		58,685		93,644		90,408		542,429
Other operating revenue	119,115		64,050		111,779		(38,471)		256,473
Other operating expense	135,123		101,449		151,012		163,689		551,273
Net direct contribution	283,684		21,286		54,411		(111,752)		247,629
Gain (loss) on financial instruments, net	(143)		(73,755)		—		73,898		—
Change in fair value of mortgage servicing rights	—		66,595		—		(66,595)		—
Gain (loss) on repossessed assets, net	(2,722)		138		—		2,584		—
Corporate expense allocations	32,880		22,200		24,575		(79,655)		—
Net income (loss) before taxes	247,939		(7,936)		29,836		(22,210)		247,629
Federal and state income taxes	60,798		(1,858)		7,070		(13,691)		52,319
Net income (loss)	187,141		(6,078)		22,766		(8,519)		195,310
Net income (loss) attributable to non-controlling interests	—		—		—		(24)		(24)
Net income (loss) attributable to BOK Financial Corp. shareholders	$	187,141	$	(6,078)	$	22,766	$	(8,495)	$	195,334

Average assets	$	29,545,278	$	10,306,218	$	19,101,045	$	(10,036,777)	$	48,915,764

- 7783 -

Reportable segments reconciliation to the Consolidated Financial Statements for the three months ended ~~March 31,~~June 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	$	155,799	$	16,686	$	48,554	$	59,381	$	280,420	Net interest revenue from external sources	$	151,942	$	17,552	$	52,966	$	57,849	$	280,309
Net interest revenue (expense) from internal sources	Net interest revenue (expense) from internal sources	(25,794)		4,288		(200)		21,706		—		Net interest revenue (expense) from internal sources	(21,041)		7,393		(673)		14,321		—
Net interest revenue	Net interest revenue	130,005		20,974		48,354		81,087		280,420		Net interest revenue	130,901		24,945		52,293		72,170		280,309
Net loans charged off and provision for credit losses	Net loans charged off and provision for credit losses	13,985		1,136		(29)		(40,092)		(25,000)		Net loans charged off and provision for credit losses	16,268		425		(54)		(51,639)		(35,000)
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	116,020		19,838		48,383		121,179		305,420		Net interest revenue after provision for credit losses	114,633		24,520		52,347		123,809		315,309
Other operating revenue	Other operating revenue	46,579		52,282		66,123		12,070		177,054		Other operating revenue	65,269		37,714		79,149		9,314		191,446
Other operating expense	Other operating expense	66,979		55,622		78,565		94,618		295,784		Other operating expense	71,351		52,453		79,518		87,830		291,152
Net direct contribution	Net direct contribution	95,620		16,498		35,941		38,631		186,690		Net direct contribution	108,551		9,781		51,978		45,293		215,603
Gain (loss) on financial instruments, net	Gain (loss) on financial instruments, net	33		(29,616)		—		29,583		—		Gain (loss) on financial instruments, net	34		17,137		—		(17,171)		—
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	—		33,874		—		(33,874)		—		Change in fair value of mortgage servicing rights	—		(13,041)		—		13,041		—
Gain (loss) on repossessed assets, net	Gain (loss) on repossessed assets, net	12,737		41		—		(12,778)		—		Gain (loss) on repossessed assets, net	3,565		—		—		(3,565)		—
Corporate expense allocations	Corporate expense allocations	12,734		11,475		9,887		(34,096)		—		Corporate expense allocations	12,512		11,599		10,352		(34,463)		—
Net income before taxes	Net income before taxes	95,656		9,322		26,054		55,658		186,690		Net income before taxes	99,638		2,278		41,626		72,061		215,603
Federal and state income taxes	Federal and state income taxes	25,983		2,374		6,672		7,353		42,382		Federal and state income taxes	27,006		580		10,638		10,272		48,496
Net income	Net income	69,673		6,948		19,382		48,305		144,308		Net income	72,632		1,698		30,988		61,789		167,107
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	—		—		—		(1,752)		(1,752)		Net income (loss) attributable to non-controlling interests	—		—		—		686		686
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders	$	69,673	$	6,948	$	19,382	$	50,057	$	146,060	Net income attributable to BOK Financial Corp. shareholders	$	72,632	$	1,698	$	30,988	$	61,103	$	166,421

Average assets	Average assets	$	28,047,052	$	9,755,539	$	18,645,865	$	(6,137,823)	$	50,310,633	Average assets	$	28,160,594	$	10,087,488	$	19,201,041	$	(7,252,201)	$	50,196,922

- 7884 -

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



	Commercial		Consumer		Wealth Management		Funds Management and Other1		BOK Financial Consolidated
Net interest revenue from external sources	$	307,741	$	34,238	$	101,520	$	117,230	$	560,729
Net interest revenue (expense) from internal sources	(46,835)		11,681		(873)		36,027		—
Net interest revenue	260,906		45,919		100,647		153,257		560,729
Provision for credit losses	30,253		1,561		(83)		(91,731)		(60,000)
Net interest revenue after provision for credit losses	230,653		44,358		100,730		244,988		620,729
Other operating revenue	111,848		89,996		145,272		21,384		368,500
Other operating expense	138,330		108,076		158,187		182,343		586,936
Net direct contribution	204,171		26,278		87,815		84,029		402,293
Gain (loss) on financial instruments, net	67		(12,479)		—		12,412		—
Change in fair value of mortgage servicing rights	—		20,833		—		(20,833)		—
Gain (loss) on repossessed assets, net	16,302		41		—		(16,343)		—
Corporate expense allocations	25,246		23,073		20,249		(68,568)		—
Net income before taxes	195,294		11,600		67,566		127,833		402,293
Federal and state income taxes	52,989		2,954		17,281		17,654		90,878
Net income	142,305		8,646		50,285		110,179		311,415
Net income (loss) attributable to non-controlling interests	—		—		—		(1,066)		(1,066)
Net income attributable to BOK Financial Corp. shareholders	$	142,305	$	8,646	$	50,285	$	111,245	$	312,481

Average assets	$	28,104,137	$	9,922,431	$	18,924,987	$	(6,698,092)	$	50,253,463

- 85 -

(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.

- 7986 -

Fees and commissions revenue by reportable segment and primary service line is as follows for the three months ended ~~March 31,~~June 30, 2022.


		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	$	—	$	—	$	(54,048)	$	—	$	(54,048)	$	(54,048)	$	—	Trading revenue	$	—	$	—	$	11,991	$	—	$	11,991	$	11,991	$	—
Customer hedging revenue	Customer hedging revenue	12,979		—		817		(2,858)		10,938		10,938		—		Customer hedging revenue	7,740		—		305		5,088		13,133		13,133		—
Retail brokerage revenue	Retail brokerage revenue	—		—		4,610		—		4,610		—		4,610		Retail brokerage revenue	—		—		4,258		—		4,258		—		4,258
Insurance brokerage revenue	Insurance brokerage revenue	—		—		3,738		—		3,738		—		3,738		Insurance brokerage revenue	—		—		2,818		—		2,818		—		2,818
Investment banking revenue	Investment banking revenue	3,358		—		4,325		—		7,683		3,099		4,584		Investment banking revenue	7,069		—		4,774		—		11,843		6,371		5,472
Brokerage and trading revenue	Brokerage and trading revenue	16,337		—		(40,558)		(2,858)		(27,079)		(40,011)		12,932		Brokerage and trading revenue	14,809		—		24,146		5,088		44,043		31,495		12,548
TransFund EFT network revenue	TransFund EFT network revenue	18,153		886		(17)		1		19,023		—		19,023		TransFund EFT network revenue	20,367		912		(19)		2		21,262		—		21,262
Merchant services revenue	Merchant services revenue	3,641		10		—		—		3,651		—		3,651		Merchant services revenue	3,867		10		—		—		3,877		—		3,877
Corporate card revenue	Corporate card revenue	1,376		—		76		90		1,542		—		1,542		Corporate card revenue	1,594		—		101		106		1,801		—		1,801
Transaction card revenue	Transaction card revenue	23,170		896		59		91		24,216		—		24,216		Transaction card revenue	25,828		922		82		108		26,940		—		26,940
Personal trust revenue	Personal trust revenue	—		—		24,797		—		24,797		—		24,797		Personal trust revenue	—		—		25,676		—		25,676		—		25,676
Corporate trust revenue	Corporate trust revenue	—		—		3,958		—		3,958		—		3,958		Corporate trust revenue	—		—		6,476		—		6,476		—		6,476
Institutional trust & retirement plan services revenue	Institutional trust & retirement plan services revenue	—		—		12,567		—		12,567		—		12,567		Institutional trust & retirement plan services revenue	—		—		12,574		—		12,574		—		12,574
Investment management services and other revenue	Investment management services and other revenue	—		—		5,121		(44)		5,077		—		5,077		Investment management services and other revenue	—		—		5,112		—		5,112		—		5,112
Fiduciary and asset management revenue	Fiduciary and asset management revenue	—		—		46,443		(44)		46,399		—		46,399		Fiduciary and asset management revenue	—		—		49,838		—		49,838		—		49,838
Commercial account service charge revenue	Commercial account service charge revenue	13,131		450		513		—		14,094		—		14,094		Commercial account service charge revenue	13,791		469		523		(1)		14,782		—		14,782
Overdraft fee revenue	Overdraft fee revenue	31		6,193		23		—		6,247		—		6,247		Overdraft fee revenue	29		6,544		21		1		6,595		—		6,595
Check card revenue	Check card revenue	—		5,545		—		—		5,545		—		5,545		Check card revenue	—		6,013		—		2		6,015		—		6,015
Automated service charge and other deposit fee revenue	Automated service charge and other deposit fee revenue	23		1,107		(14)		2		1,118		—		1,118		Automated service charge and other deposit fee revenue	21		1,061		25		1		1,108		—		1,108
Deposit service charges and fees	Deposit service charges and fees	13,185		13,295		522		2		27,004		—		27,004		Deposit service charges and fees	13,841		14,087		569		3		28,500		—		28,500
Mortgage production revenue	Mortgage production revenue	—		5,055		—		—		5,055		5,055		—		Mortgage production revenue	—		(504)		—		—		(504)		(504)		—
Mortgage servicing revenue	Mortgage servicing revenue	—		12,076		—		(481)		11,595		11,595		—		Mortgage servicing revenue	—		12,368		—		(496)		11,872		11,872		—
Mortgage banking revenue	Mortgage banking revenue	—		17,131		—		(481)		16,650		16,650		—		Mortgage banking revenue	—		11,864		—		(496)		11,368		11,368		—
Other revenue	Other revenue	4,272		2,655		18,557		(15,039)		10,445		7,275		3,170		Other revenue	5,403		3,228		12,136		(8,083)		12,684		7,900		4,784
Total fees and commissions revenue	Total fees and commissions revenue	$	56,964	$	33,977	$	25,023	$	(18,329)	$	97,635	$	(16,086)	$	113,721	Total fees and commissions revenue	$	59,881	$	30,101	$	86,771	$	(3,380)	$	173,373	$	50,763	$	122,610

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, 2022.



	Commercial		Consumer		Wealth Management		Funds Management & Other		Consolidated		Out of Scope1		In Scope2
Trading revenue	$	—	$	—	$	(42,057)	$	—	$	(42,057)	$	(42,057)	$	—
Customer hedging revenue	20,719		—		1,122		2,230		24,071		24,071		—
Retail brokerage revenue	—		—		8,868		—		8,868		—		8,868
Insurance brokerage revenue	—		—		6,556		—		6,556		—		6,556
Investment banking revenue	10,427		—		9,099		—		19,526		9,470		10,056
Brokerage and trading revenue	31,146		—		(16,412)		2,230		16,964		(8,516)		25,480
TransFund EFT network revenue	38,520		1,798		(36)		3		40,285		—		40,285
Merchant services revenue	7,508		20		—		—		7,528		—		7,528
Corporate card revenue	2,970		—		177		196		3,343		—		3,343
Transaction card revenue	48,998		1,818		141		199		51,156		—		51,156
Personal trust revenue	—		—		50,473		—		50,473		—		50,473
Corporate trust revenue	—		—		10,434		—		10,434		—		10,434
Institutional trust & retirement plan services revenue	—		—		25,141		—		25,141		—		25,141
Investment management services and other revenue	—		—		10,233		(44)		10,189		—		10,189
Fiduciary and asset management revenue	—		—		96,281		(44)		96,237		—		96,237
Commercial account service charge revenue	26,922		919		1,036		—		28,877		—		28,877
Overdraft fee revenue	60		12,737		44		1		12,842		—		12,842
Check card revenue	—		11,558		—		2		11,560		—		11,560
Automated service charge and other deposit fee revenue	44		2,168		11		2		2,225		—		2,225
Deposit service charges and fees	27,026		27,382		1,091		5		55,504		—		55,504
Mortgage production revenue	—		4,551		—		—		4,551		4,551		—
Mortgage servicing revenue	—		24,444		—		(977)		23,467		23,467		—
Mortgage banking revenue	—		28,995		—		(977)		28,018		28,018		—
Other revenue	9,675		5,883		30,693		(23,122)		23,129		15,175		7,954
Total fees and commissions revenue	$	116,845	$	64,078	$	111,794	$	(21,709)	$	271,008	$	34,677	$	236,331

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.

- 8088 -

Fees and commissions revenue by reportable segment and primary service line is as follows for the three months ended ~~March 31,~~June 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	$	—	$	—	$	3,716	$	—	$	3,716	$	3,716	$	—	Trading revenue	$	—	$	—	$	13,002	$	(1)	$	13,001	$	13,001	$	—
Customer hedging revenue	Customer hedging revenue	4,207		—		91		(1,706)		2,592		2,592		—		Customer hedging revenue	5,693		—		55		(3,943)		1,805		1,805		—
Retail brokerage revenue	Retail brokerage revenue	—		—		4,741		—		4,741		—		4,741		Retail brokerage revenue	—		—		4,528		—		4,528		—		4,528
Insurance brokerage revenue	Insurance brokerage revenue	—		—		2,916		—		2,916		—		2,916		Insurance brokerage revenue	—		—		2,996		—		2,996		—		2,996
Investment banking revenue	Investment banking revenue	2,258		—		4,768		(209)		6,817		2,049		4,768		Investment banking revenue	3,935		—		3,626		(483)		7,078		2,721		4,357
Brokerage and trading revenue	Brokerage and trading revenue	6,465		—		16,232		(1,915)		20,782		8,357		12,425		Brokerage and trading revenue	9,628		—		24,207		(4,427)		29,408		17,527		11,881
TransFund EFT network revenue	TransFund EFT network revenue	18,443		834		(13)		2		19,266		—		19,266		TransFund EFT network revenue	19,374		924		(17)		1		20,282		—		20,282
Merchant services revenue	Merchant services revenue	2,266		16		—		(1)		2,281		—		2,281		Merchant services revenue	3,434		17		—		1		3,452		—		3,452
Corporate card revenue	Corporate card revenue	804		—		28		51		883		—		883		Corporate card revenue	1,063		—		37		89		1,189		—		1,189
Transaction card revenue	Transaction card revenue	21,513		850		15		52		22,430		—		22,430		Transaction card revenue	23,871		941		20		91		24,923		—		24,923
Personal trust revenue	Personal trust revenue	—		—		21,977		—		21,977		—		21,977		Personal trust revenue	—		—		25,156		—		25,156		—		25,156
Corporate trust revenue	Corporate trust revenue	—		—		3,789		—		3,789		—		3,789		Corporate trust revenue	—		—		3,435		—		3,435		—		3,435
Institutional trust & retirement plan services revenue	Institutional trust & retirement plan services revenue	—		—		12,610		—		12,610		—		12,610		Institutional trust & retirement plan services revenue	—		—		12,828		—		12,828		—		12,828
Investment management services and other revenue	Investment management services and other revenue	—		—		2,903		43		2,946		—		2,946		Investment management services and other revenue	—		—		3,543		(130)		3,413		—		3,413
Fiduciary and asset management revenue	Fiduciary and asset management revenue	—		—		41,279		43		41,322		—		41,322		Fiduciary and asset management revenue	—		—		44,962		(130)		44,832		—		44,832
Commercial account service charge revenue	Commercial account service charge revenue	11,988		434		581		1		13,004		—		13,004		Commercial account service charge revenue	12,710		469		607		(1)		13,785		—		13,785
Overdraft fee revenue	Overdraft fee revenue	26		4,635		19		—		4,680		—		4,680		Overdraft fee revenue	22		4,916		17		2		4,957		—		4,957
Check card revenue	Check card revenue	—		5,327		—		—		5,327		—		5,327		Check card revenue	—		6,030		—		(1)		6,029		—		6,029
Automated service charge and other deposit fee revenue	Automated service charge and other deposit fee revenue	26		1,150		23		(1)		1,198		—		1,198		Automated service charge and other deposit fee revenue	25		1,042		20		3		1,090		—		1,090
Deposit service charges and fees	Deposit service charges and fees	12,040		11,546		623		—		24,209		—		24,209		Deposit service charges and fees	12,757		12,457		644		3		25,861		—		25,861
Mortgage production revenue	Mortgage production revenue	—		25,287		—		—		25,287		25,287		—		Mortgage production revenue	—		10,004		—		—		10,004		10,004		—
Mortgage servicing revenue	Mortgage servicing revenue	—		12,277		—		(451)		11,826		11,826		—		Mortgage servicing revenue	—		11,668		—		(453)		11,215		11,215		—
Mortgage banking revenue	Mortgage banking revenue	—		37,564		—		(451)		37,113		37,113		—		Mortgage banking revenue	—		21,672		—		(453)		21,219		21,219		—
Other revenue	Other revenue	9,829		2,340		7,535		(3,408)		16,296		13,143		3,153		Other revenue	17,112		2,644		9,008		(5,592)		23,172		20,041		3,131
Total fees and commissions revenue	Total fees and commissions revenue	$	49,847	$	52,300	$	65,684	$	(5,679)	$	162,152	$	58,613	$	103,539	Total fees and commissions revenue	$	63,368	$	37,714	$	78,841	$	(10,508)	$	169,415	$	58,787	$	110,628

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.

- 89 -

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



	Commercial		Consumer		Wealth Management		Funds Management & Other3		Consolidated		Out of Scope1		In Scope2
Trading revenue	$	—	$	—	$	16,718	$	(1)	$	16,717	$	16,717	$	—
Customer hedging revenue	9,900		—		146		(5,649)		4,397		4,397		—
Retail brokerage revenue	—		—		9,269		—		9,269		—		9,269
Insurance brokerage revenue	—		—		5,912		—		5,912		—		5,912
Investment banking revenue	6,193		—		8,394		(692)		13,895		4,770		9,125
Brokerage and trading revenue	16,093		—		40,439		(6,342)		50,190		25,884		24,306
TransFund EFT network revenue	37,817		1,758		(30)		3		39,548		—		39,548
Merchant services revenue	5,700		33		—		—		5,733		—		5,733
Corporate card revenue	1,867		—		65		140		2,072		—		2,072
Transaction card revenue	45,384		1,791		35		143		47,353		—		47,353
Personal trust revenue	—		—		47,133		—		47,133		—		47,133
Corporate trust revenue	—		—		7,224		—		7,224		—		7,224
Institutional trust & retirement plan services revenue	—		—		25,438		—		25,438		—		25,438
Investment management services and other revenue	—		—		6,446		(87)		6,359		—		6,359
Fiduciary and asset management revenue	—		—		86,241		(87)		86,154		—		86,154
Commercial account service charge revenue	24,698		903		1,188		—		26,789		—		26,789
Overdraft fee revenue	48		9,551		36		2		9,637		—		9,637
Check card revenue	—		11,357		—		(1)		11,356		—		11,356
Automated service charge and other deposit fee revenue	51		2,192		43		2		2,288		—		2,288
Deposit service charges and fees	24,797		24,003		1,267		3		50,070		—		50,070
Mortgage production revenue	—		35,291		—		—		35,291		35,291		—
Mortgage servicing revenue	—		23,945		—		(904)		23,041		23,041		—
Mortgage banking revenue	—		59,236		—		(904)		58,332		58,332		—
Other revenue	26,941		4,984		16,543		(9,000)		39,468		33,184		6,284
Total fees and commissions revenue	$	113,215	$	90,014	$	144,525	$	(16,187)	$	331,567	$	117,400	$	214,167

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.

- 8190 -

(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 ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, respectively. Transfers between significant other observable inputs and significant unobservable inputs during the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 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 ~~March 31,~~June 30, 2022 or December 31, 2021.

- 8291 -

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 ~~March 31,~~June 30, 2022 (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	$	13,513	$	4,978	$	8,535	$	—	U.S. government securities	$	8,357	$	8,357	$	—	$	—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	4,827,504		—		4,827,504		—		Residential agency mortgage-backed securities	2,807,950		—		2,807,950		—
Municipal securities	Municipal securities	24,539		—		24,539		—		Municipal securities	18,825		—		18,825		—
Other trading securities	Other trading securities	25,540		—		25,540		—		Other trading securities	24,312		—		24,312		—
Total trading securities	Total trading securities	4,891,096		4,978		4,886,118		—		Total trading securities	2,859,444		8,357		2,851,087		—
Available for sale securities:	Available for sale securities:									Available for sale securities:
U.S. Treasury	U.S. Treasury	947		947		—		—		U.S. Treasury	927		927		—		—
Municipal securities	Municipal securities	526,322		—		526,322		—		Municipal securities	638,305		—		638,305		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	7,612,021		—		7,612,021		—		Residential agency mortgage-backed securities	4,913,245		—		4,913,245		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	347,187		—		347,187		—		Residential non-agency mortgage-backed securities	519,613		—		519,613		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	4,407,585		—		4,407,585		—		Commercial agency mortgage-backed securities	4,080,101		—		4,080,101		—
Other debt securities	Other debt securities	472		—		—		472		Other debt securities	472		—		—		472
Total available for sale securities	Total available for sale securities	12,894,534		947		12,893,115		472		Total available for sale securities	10,152,663		927		10,151,264		472

Fair value option securities – Residential agency mortgage-backed securities	Fair value option securities – Residential agency mortgage-backed securities	185,003		—		185,003		—		Fair value option securities – Residential agency mortgage-backed securities	37,927		—		37,927		—

Residential mortgage loans held for sale1	Residential mortgage loans held for sale1	169,474		—		160,507		8,967		Residential mortgage loans held for sale1	182,726		—		174,600		8,126
Mortgage servicing rights2	Mortgage servicing rights2	209,563		—		—		209,563		Mortgage servicing rights2	270,312		—		—		270,312
Derivative contracts, net of cash collateral	Derivative contracts, net of cash collateral	2,680,207		—		2,680,207		—		Derivative contracts, net of cash collateral	1,992,977		—		1,992,977		—
Liabilities:	Liabilities:									Liabilities:
Derivative contracts, net of cash collateral	Derivative contracts, net of cash collateral	557,834		—		557,834		—		Derivative contracts, net of cash collateral	214,576		—		214,576		—

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 ~~95.07%~~86.67% 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.

- 8392 -

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of December 31, 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)
Assets:
Trading securities:
U.S. government securities	$	23,610	$	4,999	$	18,611	$	—
Residential agency mortgage-backed securities	9,068,900		—		9,068,900		—
Municipal securities	25,783		—		25,783		—
Other trading securities	18,520		—		18,520		—
Total trading securities	9,136,813		4,999		9,131,814		—
Available for sale securities:
U.S. Treasury	1,000		1,000		—		—
Municipal securities	508,365		—		508,365		—
Residential agency mortgage-backed securities	8,006,616		—		8,006,616		—
Residential non-agency mortgage-backed securities	24,339		—		24,339		—
Commercial agency mortgage-backed securities	4,617,025		—		4,617,025		—
Other debt securities	472		—		—		472
Total available for sale securities	13,157,817		1,000		13,156,345		472



Fair value option securities — Residential agency mortgage-backed securities	43,770		—		43,770		—
Residential mortgage loans held for sale1	192,295		—		185,969		6,326
Mortgage servicing rights2	163,198		—		—		163,198
Derivative contracts, net of cash collateral	1,097,297		8,331		1,088,966		—
Liabilities:
Derivative contracts, net of cash collateral	275,625		—		275,625		—

- 8493 -

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.

- 8594 -

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 ~~March 31,~~June 30, 2022 for which the fair value was adjusted during the ~~three~~six months ended ~~March 31,~~June 30, 2022:


								Fair Value Adjustments for the								Fair Value Adjustments for the
		Carrying Value at March 31, 2022						Three Months Ended Mar. 31, 2022 Recognized in:				Carrying Value at June 30, 2022						Three Months Ended Jun. 30, 2022 Recognized in:				Six Months Ended Jun. 30, 2022 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				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	$	—	$	4,168	$	244	$	818	$	—		Nonaccruing loans	$	—	$	99	$	126	$	—	$	—	$	478	$	—
Real estate and other repossessed assets	Real estate and other repossessed assets	—		1,412		400		—		106			Real estate and other repossessed assets	—		1,412		1,699		—		(5,811)		—		(5,705)

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 ~~March 31,~~June 30, 2021 for which the fair value was adjusted during the ~~three~~six months ended ~~March 31,~~June 30, 2021:


								Fair Value Adjustments for the								Fair Value Adjustments for the
		Carrying Value at March 31, 2021						Three Months Ended Mar. 31, 2021 Recognized in:				Carrying Value at June 30, 2021						Three Months Ended Jun. 30, 2021 Recognized in:				Six Months Ended Jun. 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				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	$	—	$	259	$	34,046	$	15,049	$	—		Nonaccruing loans	$	—	$	4,730	$	42,453	$	17,362	$	—	$	24,721	$	—
Real estate and other repossessed assets	Real estate and other repossessed assets	—		1,706		300		—		(2,200)			Real estate and other repossessed assets	—		1,706		36,010		—		(3,966)		—		(6,166)

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.

- 8695 -

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of ~~March 31,~~June 30, 2022 follows (in thousands):

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Nonaccruing loans

~~244~~126

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

3%25% - 25% ~~(5%~~(25%)1

Real estate and other repossessed assets

~~400~~1,699

Discounted cash flows

~~Marketability adjustments off appraised value.~~Management knowledge of industry and non-real estate collateral.2

~~75% - 75% (75%)~~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.~~

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of ~~March 31,~~June 30, 2021 follows (in thousands):

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Nonaccruing loans

~~34,046~~42,453

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

~~10%~~4% - ~~91%~~96% (47%)1

Real estate and other repossessed assets

~~300~~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.

- 8796 -

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 ~~March 31,~~June 30, 2022 (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	$	767,805	$	767,805	$	767,805	$	—	$	—	Cash and due from banks	$	1,313,563	$	1,313,563	$	1,313,563	$	—	$	—
Interest-bearing cash and cash equivalents	Interest-bearing cash and cash equivalents	599,976		599,976		599,976		—		—		Interest-bearing cash and cash equivalents	723,787		723,787		723,787		—		—
Trading securities:	Trading securities:											Trading securities:
U.S. government securities	U.S. government securities	13,513		13,513		4,978		8,535		—		U.S. government securities	8,357		8,357		8,357		—		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	4,827,504		4,827,504		—		4,827,504		—		Residential agency mortgage-backed securities	2,807,950		2,807,950		—		2,807,950		—
Municipal securities	Municipal securities	24,539		24,539		—		24,539		—		Municipal securities	18,825		18,825		—		18,825		—
Other trading securities	Other trading securities	25,540		25,540		—		25,540		—		Other trading securities	24,312		24,312		—		24,312		—
Total trading securities	Total trading securities	4,891,096		4,891,096		4,978		4,886,118		—		Total trading securities	2,859,444		2,859,444		8,357		2,851,087		—
Investment securities:	Investment securities:											Investment securities:
Municipal securities	Municipal securities	177,683		184,214		—		41,920		142,294		Municipal securities	175,974		180,783		—		41,498		139,285
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	6,486		6,741		—		6,741		—		Residential agency mortgage-backed securities	2,445,845		2,410,926		—		2,410,926		—
Commercial agency mortgage-backed securities												Commercial agency mortgage-backed securities	15,455		15,279		—		15,279		—
Other debt securities	Other debt securities	288		280		—		280		—		Other debt securities	788		769		—		769		—
Total investment securities	Total investment securities	184,457		191,235		—		48,941		142,294		Total investment securities	2,638,062		2,607,757		—		2,468,472		139,285
Allowance for credit losses	Allowance for credit losses	(633)		—		—		—		—		Allowance for credit losses	(717)		—		—		—		—
Investment securities, net of allowance	Investment securities, net of allowance	183,824		191,235		—		48,941		142,294		Investment securities, net of allowance	2,637,345		2,607,757		—		2,468,472		139,285
Available for sale securities:	Available for sale securities:											Available for sale securities:
U.S. Treasury	U.S. Treasury	947		947		947		—		—		U.S. Treasury	927		927		927		—		—
Municipal securities	Municipal securities	526,322		526,322		—		526,322		—		Municipal securities	638,305		638,305		—		638,305		—
Residential agency mortgage-backed securities	Residential agency mortgage-backed securities	7,612,021		7,612,021		—		7,612,021		—		Residential agency mortgage-backed securities	4,913,245		4,913,245		—		4,913,245		—
Residential non-agency mortgage-backed securities	Residential non-agency mortgage-backed securities	347,187		347,187		—		347,187		—		Residential non-agency mortgage-backed securities	519,613		519,613		—		519,613		—
Commercial agency mortgage-backed securities	Commercial agency mortgage-backed securities	4,407,585		4,407,585		—		4,407,585		—		Commercial agency mortgage-backed securities	4,080,101		4,080,101		—		4,080,101		—
Other debt securities	Other debt securities	472		472		—		—		472		Other debt securities	472		472		—		—		472
Total available for sale securities	Total available for sale securities	12,894,534		12,894,534		947		12,893,115		472		Total available for sale securities	10,152,663		10,152,663		927		10,151,264		472

Fair value option securities – Residential agency mortgage-backed securities	Fair value option securities – Residential agency mortgage-backed securities	185,003		185,003		—		185,003		—		Fair value option securities – Residential agency mortgage-backed securities	37,927		37,927		—		37,927		—

Residential mortgage loans held for sale	Residential mortgage loans held for sale	169,474		169,474		—		160,507		8,967		Residential mortgage loans held for sale	182,726		182,726		—		174,600		8,126
Loans:	Loans:											Loans:
Commercial	Commercial	12,883,189		12,639,182		—		—		12,639,182		Commercial	13,578,697		13,334,931		—		—		13,334,931
Commercial real estate	Commercial real estate	4,100,956		3,985,876		—		—		3,985,876		Commercial real estate	4,106,148		3,991,292		—		—		3,991,292
Paycheck protection program	Paycheck protection program	137,365		134,313		—		—		134,313		Paycheck protection program	43,140		43,140		—		—		43,140
Loans to individuals	Loans to individuals	3,552,919		3,470,751		—		—		3,470,751		Loans to individuals	3,563,163		3,422,548		—		—		3,422,548
Total loans	Total loans	20,674,429		20,230,122		—		—		20,230,122		Total loans	21,291,148		20,791,911		—		—		20,791,911
Allowance for loan losses	Allowance for loan losses	(246,473)		—		—		—		—		Allowance for loan losses	(241,114)		—		—		—		—
Loans, net of allowance	Loans, net of allowance	20,427,956		20,230,122		—		—		20,230,122		Loans, net of allowance	21,050,034		20,791,911		—		—		20,791,911
Mortgage servicing rights	Mortgage servicing rights	209,563		209,563		—		—		209,563		Mortgage servicing rights	270,312		270,312		—		—		270,312
Derivative instruments with positive fair value, net of cash collateral	Derivative instruments with positive fair value, net of cash collateral	2,680,207		2,680,207		—		2,680,207		—		Derivative instruments with positive fair value, net of cash collateral	1,992,977		1,992,977		—		1,992,977		—
Deposits with no stated maturity	Deposits with no stated maturity	37,911,535		37,911,535		—		—		37,911,535		Deposits with no stated maturity	37,249,319		37,249,319		—		—		37,249,319
Time deposits	Time deposits	1,514,416		1,498,269		—		—		1,498,269		Time deposits	1,369,599		1,346,175		—		—		1,346,175
Other borrowed funds	Other borrowed funds	1,104,575		1,102,079		—		—		1,102,079		Other borrowed funds	712,535		710,004		—		—		710,004
Subordinated debentures	Subordinated debentures	131,209		138,623		—		138,623		—		Subordinated debentures	131,223		130,136		—		130,136		—
Derivative instruments with negative fair value, net of cash collateral	Derivative instruments with negative fair value, net of cash collateral	557,834		557,834		—		557,834		—		Derivative instruments with negative fair value, net of cash collateral	214,576		214,576		—		214,576		—

- 8897 -


	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	$	712,067	$	712,067	$	712,067	$	—	$	—
Interest-bearing cash and cash equivalents	2,125,343		2,125,343		2,125,343		—		—
Trading securities:
U.S. government securities	23,610		23,610		4,999		18,611		—
Residential agency mortgage-backed securities	9,068,900		9,068,900		—		9,068,900		—
Municipal securities	25,783		25,783		—		25,783		—
Other trading securities	18,520		18,520		—		18,520		—
Total trading securities	9,136,813		9,136,813		4,999		9,131,814		—
Investment securities:
Municipal securities	203,772		223,609		—		57,698		165,911
Residential agency mortgage-backed securities	6,939		7,500		—		7,500		—
Other debt securities	288		286		—		286		—
Total investment securities	210,999		231,395		—		65,484		165,911
Allowance for credit losses	(555)		—		—		—		—
Investment securities, net of allowance	210,444		231,395		—		65,484		165,911
Available for sale securities:
U.S. Treasury	1,000		1,000		1,000		—		—
Municipal securities	508,365		508,365		—		508,365		—
Residential agency mortgage-backed securities	8,006,616		8,006,616		—		8,006,616		—
Residential non-agency mortgage-backed securities	24,339		24,339		—		24,339		—
Commercial agency mortgage-backed securities	4,617,025		4,617,025		—		4,617,025		—
Other debt securities	472		472		—		—		472
Total available for sale securities	13,157,817		13,157,817		1,000		13,156,345		472



Fair value option securities — Residential agency mortgage-backed securities	43,770		43,770		—		43,770		—
Residential mortgage loans held for sale	192,295		192,295		—		185,969		6,326
Loans:
Commercial	12,506,465		12,395,664		—		—		12,395,664
Commercial real estate	3,831,325		3,786,767		—		—		3,786,767
Paycheck protection program	276,341		269,912		—		—		269,912
Loans to individuals	3,591,549		3,586,878		—		—		3,586,878
Total loans	20,205,680		20,039,221		—		—		20,039,221
Allowance for loan losses	(256,421)		—		—		—		—
Loans, net of allowance	19,949,259		20,039,221		—		—		20,039,221
Mortgage servicing rights	163,198		163,198		—		—		163,198
Derivative instruments with positive fair value, net of cash collateral	1,097,297		1,097,297		8,331		1,088,966		—
Deposits with no stated maturity	39,537,731		39,537,731		—		—		39,537,731
Time deposits	1,704,328		1,703,886		—		—		1,703,886
Other borrowed funds	2,363,202		2,360,746		—		—		2,360,746
Subordinated debentures	131,226		141,761		—		141,761		—
Derivative instruments with negative fair value, net of cash collateral	275,625		275,625		—		275,625		—

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.

- 8998 -

(12) Subsequent Events

The Company evaluated events from the date of the consolidated financial statements on ~~March 31,~~June 30, 2022 through the issuance of those consolidated financial statements included in this Quarterly Report on Form 10-Q. No events were identified requiring recognition in and/or disclosure in the consolidated financial statements.

- 9099 -

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

Consolidated Daily Average Balances, Average Yields and Rates


(In Thousands, Except Per Share Data)	(In Thousands, Except Per Share Data)	Three Months Ended												(In Thousands, Except Per Share Data)	Six Months Ended
		March 31, 2022						December 31, 2021							June 30, 2022						June 30, 2021
		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	$	1,050,409	$	473	0.18	%	$	1,208,552	$	483	0.16	%	Interest-bearing cash and cash equivalents	$	946,442	$	2,210	0.47	%	$	685,037	$	332	0.10	%
Trading securities	Trading securities	8,537,390		41,041		1.71	%	9,260,778		44,537		1.89	%	Trading securities	6,340,099		64,050		1.81	%	7,198,206		72,671		2.00	%
Investment securities, net of allowance		195,198		2,475		5.07	%	213,188		2,661		4.99	%
Investment securities														Investment securities	404,239		6,060		3.00	%	229,313		5,664		4.94	%
Available for sale securities	Available for sale securities	13,092,422		58,018		1.77	%	13,247,607		55,638		1.72	%	Available for sale securities	12,672,942		116,900		1.80	%	13,338,129		117,669		1.84	%
Fair value option securities	Fair value option securities	75,539		491		2.81	%	46,458		302		2.71	%	Fair value option securities	65,128		928		2.86	%	84,653		898		2.20	%
Restricted equity securities	Restricted equity securities	164,484		1,107		2.69	%	137,874		1,028		2.98	%	Restricted equity securities	166,118		2,491		3.00	%	199,358		3,110		3.12	%
Residential mortgage loans held for sale	Residential mortgage loans held for sale	179,697		1,394		3.11	%	163,433		1,242		3.06	%	Residential mortgage loans held for sale	163,853		2,953		3.62	%	212,638		2,949		2.81	%
Loans	Loans	20,463,662		180,073		3.57	%	20,242,653		188,547		3.70	%	Loans	20,762,329		385,767		3.75	%	22,460,418		395,460		3.55	%
Allowance for loan losses	Allowance for loan losses	(254,191)						(271,794)						Allowance for loan losses	(250,105)						(363,898)
Loans, net of allowance	Loans, net of allowance	20,209,471		180,073		3.61	%	19,970,859		188,547		3.75	%	Loans, net of allowance	20,512,224		385,767		3.79	%	22,096,520		395,460		3.61	%
Total earning assets	Total earning assets	43,504,610		285,072		2.58	%	44,248,749		294,438		2.66	%	Total earning assets	41,271,045		581,359		2.76	%	44,043,854		598,753		2.77	%
Receivable on unsettled securities sales	Receivable on unsettled securities sales	375,616						585,901						Receivable on unsettled securities sales	416,616						726,039
Cash and other assets	Cash and other assets	6,680,848						5,769,406						Cash and other assets	7,228,034						5,483,570
Total assets	Total assets	$	50,561,074					$	50,604,056					Total assets	$	48,915,695					$	50,253,463
Liabilities and equity	Liabilities and equity													Liabilities and equity
Interest-bearing deposits:	Interest-bearing deposits:													Interest-bearing deposits:
Transaction	Transaction	$	22,763,479	$	5,343	0.10	%	$	22,326,401	$	5,097	0.09	%	Transaction	$	21,895,619	$	16,797	0.15	%	$	21,462,436	$	11,862	0.11	%
Savings	Savings	947,407		73		0.03	%	909,131		96		0.04	%	Savings	964,544		149		0.03	%	831,366		182		0.04	%
Time	Time	1,589,039		2,182		0.56	%	1,747,715		2,351		0.53	%	Time	1,480,441		4,514		0.61	%	1,961,329		6,231		0.64	%
Total interest-bearing deposits	Total interest-bearing deposits	25,299,925		7,598		0.12	%	24,983,247		7,544		0.12	%	Total interest-bearing deposits	24,340,604		21,460		0.18	%	24,255,131		18,275		0.15	%
Funds purchased and repurchase agreements	Funds purchased and repurchase agreements	2,004,466		4,698		0.95	%	2,893,128		5,292		0.73	%	Funds purchased and repurchase agreements	1,612,144		6,306		0.79	%	2,307,562		2,070		0.18	%
Other borrowings	Other borrowings	1,148,440		1,090		0.38	%	880,837		1,091		0.49	%	Other borrowings	1,225,321		4,376		0.72	%	3,500,953		6,358		0.37	%
Subordinated debentures	Subordinated debentures	131,228		1,302		4.02	%	131,224		1,330		4.02	%	Subordinated debentures	131,223		2,775		4.26	%	276,025		6,700		4.89	%
Total interest-bearing liabilities	Total interest-bearing liabilities	28,584,059		14,688		0.21	%	28,888,436		15,257		0.21	%	Total interest-bearing liabilities	27,309,292		34,917		0.26	%	30,339,671		33,403		0.22	%
Non-interest bearing demand deposits	Non-interest bearing demand deposits	15,062,282						14,818,841						Non-interest bearing demand deposits	15,132,828						12,753,715
Due on unsettled securities purchases	Due on unsettled securities purchases	519,097						629,642						Due on unsettled securities purchases	449,331						807,862
Other liabilities	Other liabilities	1,247,785						898,848						Other liabilities	1,085,302						1,050,157
Total equity	Total equity	5,147,851						5,368,289						Total equity	4,938,942						5,302,058
Total liabilities and equity	Total liabilities and equity	$	50,561,074					$	50,604,056					Total liabilities and equity	$	48,915,695					$	50,253,463
Tax-equivalent Net Interest Revenue	Tax-equivalent Net Interest Revenue			$	270,384	2.37	%			$	279,181	2.45	%	Tax-equivalent Net Interest Revenue			$	546,442	2.50	%			$	565,350	2.55	%
Tax-equivalent Net Interest Revenue to Earning Assets	Tax-equivalent Net Interest Revenue to Earning Assets					2.44	%					2.52	%	Tax-equivalent Net Interest Revenue to Earning Assets					2.60	%					2.61	%
Less tax-equivalent adjustment	Less tax-equivalent adjustment			1,973						2,104				Less tax-equivalent adjustment			4,013						4,621
Net Interest Revenue	Net Interest Revenue			268,411						277,077				Net Interest Revenue			542,429						560,729
Provision for credit losses	Provision for credit losses			—						(17,000)				Provision for credit losses			—						(60,000)
Other operating revenue	Other operating revenue			87,856						157,443				Other operating revenue			256,473						368,500
Other operating expense	Other operating expense			277,618						299,495				Other operating expense			551,273						586,936
Income before taxes	Income before taxes			78,649						152,025				Income before taxes			247,629						402,293
Federal and state income taxes	Federal and state income taxes			16,197						34,836				Federal and state income taxes			52,319						90,878
Net income	Net income			62,452						117,189				Net income			195,310						311,415
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests			(36)						(129)				Net income (loss) attributable to non-controlling interests			(24)						(1,066)
Net income attributable to BOK Financial Corp. shareholders	Net income attributable to BOK Financial Corp. shareholders			$	62,488					$	117,318			Net income attributable to BOK Financial Corp. shareholders			$	195,334					$	312,481
Earnings Per Average Common Share Equivalent:	Earnings Per Average Common Share Equivalent:													Earnings Per Average Common Share Equivalent:
Net income:														Net income:
Basic	Basic			$	0.91					$	1.71			Basic			$	2.87					$	4.50
Diluted	Diluted			$	0.91					$	1.71			Diluted			$	2.87					$	4.50

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.

- 91100 -

Quarterly Financial Summary – Unaudited

Consolidated Daily Average Balances, Average Yields and Rates


(In Thousands, Except Per Share Data)	Three Months Ended
	June 30, 2022						March 31, 2022
	Average Balance		Revenue/ Expense		Yield/ Rate		Average Balance		Revenue/ Expense		Yield/ Rate
Assets
Interest-bearing cash and cash equivalents	$	843,619	$	1,737	0.83	%	$	1,050,409	$	473	0.18	%
Trading securities	4,166,954		23,009		2.00	%	8,537,390		41,041		1.71	%
Investment securities, net of allowance	610,983		3,585		2.35	%	195,198		2,475		5.07	%
Available for sale securities	12,258,072		58,882		1.84	%	13,092,422		58,018		1.77	%
Fair value option securities	54,832		437		2.92	%	75,539		491		2.81	%
Restricted equity securities	167,732		1,384		3.30	%	164,484		1,107		2.69	%
Residential mortgage loans held for sale	148,183		1,559		4.22	%	179,697		1,394		3.11	%
Loans	21,057,714		205,694		3.92	%	20,463,662		180,073		3.57	%
Allowance for loan losses	(246,064)						(254,191)
Loans, net of allowance	20,811,650		205,694		3.96	%	20,209,471		180,073		3.61	%
Total earning assets	39,062,025		296,287		2.96	%	43,504,610		285,072		2.58	%
Receivable on unsettled securities sales	457,165						375,616
Cash and other assets	7,769,208						6,680,848
Total assets	$	47,288,398					$	50,561,074
Liabilities and equity
Interest-bearing deposits:
Transaction	$	21,037,294	$	11,454	0.22	%	$	22,763,479	$	5,343	0.10	%
Savings	981,493		76		0.03	%	947,407		73		0.03	%
Time	1,373,036		2,332		0.68	%	1,589,039		2,182		0.56	%
Total interest-bearing deposits	23,391,823		13,862		0.24	%	25,299,925		7,598		0.12	%
Funds purchased and repurchase agreements	1,224,134		1,608		0.53	%	2,004,466		4,698		0.95	%
Other borrowings	1,301,358		3,286		1.01	%	1,148,440		1,090		0.38	%
Subordinated debentures	131,219		1,473		4.50	%	131,228		1,302		4.02	%
Total interest-bearing liabilities	26,048,534		20,229		0.31	%	28,584,059		14,688		0.21	%
Non-interest bearing demand deposits	15,202,597						15,062,282
Due on unsettled securities purchases	380,332						519,097
Other liabilities	924,605						1,247,785
Total equity	4,732,330						5,147,851
Total liabilities and equity	$	47,288,398					$	50,561,074
Tax-equivalent Net Interest Revenue			$	276,058	2.65	%			$	270,384	2.37	%
Tax-equivalent Net Interest Revenue to Earning Assets					2.76	%					2.44	%
Less tax-equivalent adjustment			2,040						1,973
Net Interest Revenue			274,018						268,411
Provision for credit losses			—						—
Other operating revenue			168,617						87,856
Other operating expense			273,655						277,618
Income before taxes			168,980						78,649
Federal and state income taxes			36,122						16,197
Net income			132,858						62,452
Net income (loss) attributable to non-controlling interests			12						(36)
Net income attributable to BOK Financial Corp. shareholders			$	132,846					$	62,488
Earnings Per Average Common Share Equivalent:
Basic			$	1.96					$	0.91
Diluted			$	1.96					$	0.91

- 101 -

Three Months Ended
September 30, 2021 June 30, 2021 March 31, 2021
Average Balance Revenue /Expense Yield / Rate Average Balance Revenue / Expense Yield / Rate Average Balance Revenue / Expense Yield / Rate
$ 682,788 $ 245 0.14 % $ 659,312 $ 158 0.10 % $ 711,047 $ 174 0.10 %
7,617,236 39,006 2.04 % 7,430,217 36,702 1.95 % 6,963,617 35,969 2.06 %
218,117 2,740 5.02 % 221,401 2,771 5.01 % 237,313 2,893 4.88 %
13,446,095 57,391 1.80 % 13,243,542 58,989 1.85 % 13,433,767 58,680 1.84 %
56,307 342 2.62 % 64,864 402 2.60 % 104,662 496 1.95 %
245,485 1,565 2.55 % 208,692 1,751 3.36 % 189,921 1,359 2.86 %
167,620 1,274 3.06 % 218,200 1,569 2.91 % 207,013 1,380 2.71 %
20,848,608 193,117 3.68 % 22,167,089 195,871 3.54 % 22,757,007 199,589 3.55 %
(306,125) (345,269) (382,734)
20,542,483 193,117 3.73 % 21,821,820 195,871 3.60 % 22,374,273 199,589 3.62 %
42,976,131 295,680 2.78 % 43,868,048 298,213 2.75 % 44,221,613 300,540 2.78 %
632,539 716,700 735,482
5,890,479 5,612,174 5,353,538
$ 49,499,149 $ 50,196,922 $ 50,310,633
$ 21,435,736 $ 5,002 0.09 % $ 21,491,145 $ 5,539 0.10 % $ 21,433,406 $ 6,323 0.12 %
888,011 96 0.04 % 872,618 96 0.04 % 789,656 86 0.04 %
1,839,983 2,567 0.55 % 1,936,510 2,790 0.58 % 1,986,425 3,441 0.70 %
24,163,730 7,665 0.13 % 24,300,273 8,425 0.14 % 24,209,487 9,850 0.17 %
1,448,800 722 0.20 % 1,790,490 722 0.16 % 2,830,378 1,348 0.19 %
2,546,083 2,344 0.37 % 3,608,369 3,084 0.34 % 3,392,346 3,274 0.39 %
214,654 2,505 4.63 % 276,034 3,353 4.87 % 276,015 3,347 4.92 %
28,373,267 13,236 0.19 % 29,975,166 15,584 0.21 % 30,708,226 17,819 0.24 %
13,670,656 13,189,954 12,312,629
957,538 701,495 915,410
1,054,247 1,000,662 1,100,203
5,443,441 5,329,645 5,274,165
$ 49,499,149 $ 50,196,922 $ 50,310,633
$ 282,444 2.59 % $ 282,629 2.54 % $ 282,721 2.54 %
2.66 % 2.60 % 2.62 %
2,217 2,320 2,301
280,227 280,309 280,420
(23,000) (35,000) (25,000)
229,832 191,446 177,054
291,277 291,152 295,784
241,782 215,603 186,690
54,061 48,496 42,382
187,721 167,107 144,308
(601) 686 (1,752)
$ 188,322 $ 166,421 $ 146,060
$ 2.74 $ 2.40 $ 2.10
$ 2.74 $ 2.40 $ 2.10


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

$	1,208,552	$	483	0.16	%	$	682,788	$	245	0.14	%	$	659,312	$	158	0.10	%
9,260,778		44,537		1.89	%	7,617,236		39,006		2.04	%	7,430,217		36,702		1.95	%
213,188		2,661		4.99	%	218,117		2,740		5.02	%	221,401		2,771		5.01	%
13,247,607		55,638		1.72	%	13,446,095		57,391		1.80	%	13,243,542		58,989		1.85	%
46,458		302		2.71	%	56,307		342		2.62	%	64,864		402		2.60	%
137,874		1,028		2.98	%	245,485		1,565		2.55	%	208,692		1,751		3.36	%
163,433		1,242		3.06	%	167,620		1,274		3.06	%	218,200		1,569		2.91	%
20,242,653		188,547		3.70	%	20,848,608		193,117		3.68	%	22,167,089		195,871		3.54	%
(271,794)						(306,125)						(345,269)
19,970,859		188,547		3.75	%	20,542,483		193,117		3.73	%	21,821,820		195,871		3.60	%
44,248,749		294,438		2.66	%	42,976,131		295,680		2.78	%	43,868,048		298,213		2.75	%
585,901						632,539						716,700
5,769,406						5,890,479						5,612,174
$	50,604,056					$	49,499,149					$	50,196,922


$	22,326,401	$	5,097	0.09	%	$	21,435,736	$	5,002	0.09	%	$	21,491,145	$	5,539	0.10	%
909,131		96		0.04	%	888,011		96		0.04	%	872,618		96		0.04	%
1,747,715		2,351		0.53	%	1,839,983		2,567		0.55	%	1,936,510		2,790		0.58	%
24,983,247		7,544		0.12	%	24,163,730		7,665		0.13	%	24,300,273		8,425		0.14	%
2,893,128		5,292		0.73	%	1,448,800		722		0.20	%	1,790,490		722		0.16	%
880,837		1,091		0.49	%	2,546,083		2,344		0.37	%	3,608,369		3,084		0.34	%
131,224		1,330		4.02	%	214,654		2,505		4.63	%	276,034		3,353		4.87	%
28,888,436		15,257		0.21	%	28,373,267		13,236		0.19	%	29,975,166		15,584		0.21	%
14,818,841						13,670,656						13,189,954
629,642						957,538						701,495
898,848						1,054,247						1,000,662
5,368,289						5,443,441						5,329,645
$	50,604,056					$	49,499,149					$	50,196,922
		$	279,181	2.45	%			$	282,444	2.59	%			$	282,629	2.54	%
				2.52	%					2.66	%					2.60	%
		2,104						2,217						2,320
		277,077						280,227						280,309
		(17,000)						(23,000)						(35,000)
		157,443						229,832						191,446
		299,495						291,277						291,152
		152,025						241,782						215,603
		34,836						54,061						48,496
		117,189						187,721						167,107
		(129)						(601)						686
		$	117,318					$	188,322					$	166,421

		$	1.71					$	2.74					$	2.40
		$	1.71					$	2.74					$	2.40

- 92102 -

Quarterly Earnings Trends – Unaudited

(In thousands, except share and per share data)


		Three Months Ended											Three Months Ended
		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021		Mar. 31, 2021			Jun. 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sept 30, 2021		Jun. 30, 2021

Interest revenue	Interest revenue	$	283,099	$	292,334	$	293,463	$	295,893	$	298,239	Interest revenue	$	294,247	$	283,099	$	292,334	$	293,463	$	295,893
Interest expense	Interest expense	14,688		15,257		13,236		15,584		17,819		Interest expense	20,229		14,688		15,257		13,236		15,584
Net interest revenue	Net interest revenue	268,411		277,077		280,227		280,309		280,420		Net interest revenue	274,018		268,411		277,077		280,227		280,309
Provision for credit losses	Provision for credit losses	—		(17,000)		(23,000)		(35,000)		(25,000)		Provision for credit losses	—		—		(17,000)		(23,000)		(35,000)
Net interest revenue after provision for credit losses	Net interest revenue after provision for credit losses	268,411		294,077		303,227		315,309		305,420		Net interest revenue after provision for credit losses	274,018		268,411		294,077		303,227		315,309
Other operating revenue	Other operating revenue											Other operating revenue
Brokerage and trading revenue	Brokerage and trading revenue	(27,079)		14,869		47,930		29,408		20,782		Brokerage and trading revenue	44,043		(27,079)		14,869		47,930		29,408
Transaction card revenue	Transaction card revenue	24,216		24,998		24,632		24,923		22,430		Transaction card revenue	26,940		24,216		24,998		24,632		24,923
Fiduciary and asset management revenue	Fiduciary and asset management revenue	46,399		46,872		45,248		44,832		41,322		Fiduciary and asset management revenue	49,838		46,399		46,872		45,248		44,832
Deposit service charges and fees	Deposit service charges and fees	27,004		26,718		27,429		25,861		24,209		Deposit service charges and fees	28,500		27,004		26,718		27,429		25,861
Mortgage banking revenue	Mortgage banking revenue	16,650		21,278		26,286		21,219		37,113		Mortgage banking revenue	11,368		16,650		21,278		26,286		21,219
Other revenue	Other revenue	10,445		11,586		18,896		23,172		16,296		Other revenue	12,684		10,445		11,586		18,896		23,172
Total fees and commissions	Total fees and commissions	97,635		146,321		190,421		169,415		162,152		Total fees and commissions	173,373		97,635		146,321		190,421		169,415
Other gains, net		(1,644)		6,081		31,091		16,449		10,121
Other gains (losses), net												Other gains (losses), net	(7,639)		(1,644)		6,081		31,091		16,449
Gain (loss) on derivatives, net	Gain (loss) on derivatives, net	(46,981)		(4,788)		(5,760)		18,820		(27,650)		Gain (loss) on derivatives, net	(13,569)		(46,981)		(4,788)		(5,760)		18,820
Gain (loss) on fair value option securities, net	Gain (loss) on fair value option securities, net	(11,201)		1,418		(120)		(1,627)		(1,910)		Gain (loss) on fair value option securities, net	(2,221)		(11,201)		1,418		(120)		(1,627)
Change in fair value of mortgage servicing rights	Change in fair value of mortgage servicing rights	49,110		7,859		12,945		(13,041)		33,874		Change in fair value of mortgage servicing rights	17,485		49,110		7,859		12,945		(13,041)
Gain on available for sale securities, net	Gain on available for sale securities, net	937		552		1,255		1,430		467		Gain on available for sale securities, net	1,188		937		552		1,255		1,430

Total other operating revenue	Total other operating revenue	87,856		157,443		229,832		191,446		177,054		Total other operating revenue	168,617		87,856		157,443		229,832		191,446
Other operating expense	Other operating expense											Other operating expense
Personnel	Personnel	159,228		174,474		175,863		172,035		173,010		Personnel	154,923		159,228		174,474		175,863		172,035
Business promotion	Business promotion	6,513		6,452		4,939		2,744		2,154		Business promotion	6,325		6,513		6,452		4,939		2,744
Charitable contributions to BOKF Foundation	Charitable contributions to BOKF Foundation	—		5,000		—		—		4,000		Charitable contributions to BOKF Foundation	—		—		5,000		—		—
Professional fees and services	Professional fees and services	11,413		14,129		12,436		12,361		11,980		Professional fees and services	12,475		11,413		14,129		12,436		12,361
Net occupancy and equipment	Net occupancy and equipment	30,855		26,897		28,395		26,633		26,662		Net occupancy and equipment	27,489		30,855		26,897		28,395		26,633
Insurance	Insurance	4,283		3,889		3,712		3,660		4,620		Insurance	4,728		4,283		3,889		3,712		3,660
Data processing and communications	Data processing and communications	39,836		39,358		38,371		36,418		37,467		Data processing and communications	41,280		39,836		39,358		38,371		36,418
Printing, postage and supplies	Printing, postage and supplies	3,689		2,935		3,558		4,285		3,440		Printing, postage and supplies	3,929		3,689		2,935		3,558		4,285
Amortization of intangible assets	Amortization of intangible assets	3,964		4,438		4,488		4,578		4,807		Amortization of intangible assets	4,049		3,964		4,438		4,488		4,578
Mortgage banking costs	Mortgage banking costs	7,877		8,667		8,962		11,126		13,943		Mortgage banking costs	9,437		7,877		8,667		8,962		11,126
Other expense	Other expense	9,960		13,256		10,553		17,312		13,701		Other expense	9,020		9,960		13,256		10,553		17,312
Total other operating expense	Total other operating expense	277,618		299,495		291,277		291,152		295,784		Total other operating expense	273,655		277,618		299,495		291,277		291,152
Net income before taxes	Net income before taxes	78,649		152,025		241,782		215,603		186,690		Net income before taxes	168,980		78,649		152,025		241,782		215,603
Federal and state income taxes	Federal and state income taxes	16,197		34,836		54,061		48,496		42,382		Federal and state income taxes	36,122		16,197		34,836		54,061		48,496
Net income	Net income	62,452		117,189		187,721		167,107		144,308		Net income	132,858		62,452		117,189		187,721		167,107
Net income (loss) attributable to non-controlling interests	Net income (loss) attributable to non-controlling interests	(36)		(129)		(601)		686		(1,752)		Net income (loss) attributable to non-controlling interests	12		(36)		(129)		(601)		686
Net income attributable to BOK Financial Corporation shareholders	Net income attributable to BOK Financial Corporation shareholders	$	62,488	$	117,318	$	188,322	$	166,421	$	146,060	Net income attributable to BOK Financial Corporation shareholders	$	132,846	$	62,488	$	117,318	$	188,322	$	166,421

Earnings per share:	Earnings per share:											Earnings per share:
Basic	Basic	$0.91		$1.71		$2.74		$2.40		$2.10		Basic	$1.96		$0.91		$1.71		$2.74		$2.40
Diluted	Diluted	$0.91		$1.71		$2.74		$2.40		$2.10		Diluted	$1.96		$0.91		$1.71		$2.74		$2.40
Average shares used in computation:	Average shares used in computation:											Average shares used in computation:
Basic	Basic	67,812,400		68,069,160		68,359,125		68,815,666		69,137,375		Basic	67,453,748		67,812,400		68,069,160		68,359,125		68,815,666
Diluted	Diluted	67,813,851		68,070,910		68,360,871		68,817,442		69,141,710		Diluted	67,455,172		67,813,851		68,070,910		68,360,871		68,817,442

- 93103 -

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 ~~March 31,~~June 30, 2022.

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
January 1 to January 31, 2022 258,359 $ 102.50 230,877 1,435,653
February 1 to February 28, 2022 228,571 $ 101.03 210,000 1,225,653
March 1 to March 31, 2022 35,000 $ 98.33 35,000 1,190,653
Total 521,930 475,877


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, 2022	35,000	$	84.81	35,000	1,155,653
May 1 to May 31, 2022	169,084	$	85.12	169,084	986,569
June 1 to June 30, 2022	90,000	$	78.26	90,000	896,569
Total	294,084			294,084

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 ~~March 31,~~June 30, 2022, the Company had repurchased ~~3,809,347~~4,103,431 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.

- 94104 -

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: ~~May 4,~~August 3, 2022


/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

- 95105 -


	Three Months Ended Mar. 31, 2022 / 2021
			Change Due To1
	Change		Volume		Yield/Rate
Tax-equivalent interest revenue:
Interest-bearing cash and cash equivalents	$	299	$	121	$	178
Trading securities	5,072		12,244		(7,172)
Investment securities	(418)		(498)		80
Available for sale securities	(662)		1,625		(2,287)
Fair value option securities	(5)		(187)		182
Restricted equity securities	(252)		(173)		(79)
Residential mortgage loans held for sale	14		(175)		189
Loans	(19,516)		(20,356)		840
Total tax-equivalent interest revenue	(15,468)		(7,399)		(8,069)
Interest expense:
Transaction deposits	(980)		235		(1,215)
Savings deposits	(13)		11		(24)
Time deposits	(1,259)		(630)		(629)
Funds purchased and repurchase agreements	3,350		(1,170)		4,520
Other borrowings	(2,184)		(2,129)		(55)
Subordinated debentures	(2,045)		(1,594)		(451)
Total interest expense	(3,131)		(5,277)		2,146
Tax-equivalent net interest revenue	(12,337)		(2,122)		(10,215)
Change in tax-equivalent adjustment	(328)
Net interest revenue	$	(12,009)


	Three Months Ended
	March 31,
	2022		2021
Cash Flows From Operating Activities:
Net income	$	62,452	$	144,308
Adjustments to reconcile net income to net cash provided (used in) operating activities:
Provision for credit losses	—		(25,000)
Change in fair value of mortgage servicing rights due to market assumption changes	(49,110)		(33,874)
Change in the fair value of mortgage servicing rights due to principal payments	7,960		11,961
Net unrealized (gains) losses from derivative contracts	(31,298)		92,502
Share-based compensation	2,835		2,724
Depreciation and amortization	26,091		24,918
Net amortization of discounts and premiums	3,216		4,853
Net losses (gains) on financial instruments and other losses (gains), net	706		(10,587)
Net gain on mortgage loans held for sale	(1,056)		(19,045)
Mortgage loans originated for sale	(418,866)		(843,053)
Proceeds from sale of mortgage loans held for sale	446,742		836,209
Capitalized mortgage servicing rights	(5,215)		(9,830)

Change in trading and fair value option securities	4,104,453		(335,624)
Change in receivables	(88,559)		15,650
Change in other assets	(19,589)		(24,991)
Change in other liabilities	(107,508)		(49,998)
Net cash provided by (used in) operating activities	3,933,254		(218,877)
Cash Flows From Investing Activities:
Proceeds from maturities or redemptions of investment securities	26,363		18,624
Proceeds from maturities or redemptions of available for sale securities	723,730		877,257

Purchases of available for sale securities	(1,161,606)		(1,451,909)
Proceeds from sales of available for sale securities	55,185		56,037
Change in amount receivable on unsettled available for sale securities transactions	(99,944)		(26,130)
Loans originated, net of principal collected	(460,128)		498,667
Net payments on derivative asset contracts	34,855		(7,016)

Net change in restricted equity securities	5,724		31,777
Proceeds from disposition of assets	9,708		43,739
Purchases of assets	(37,569)		(63,110)
Net cash provided by (used in) investing activities	(903,682)		(22,064)
Cash Flows From Financing Activities:
Net change in demand deposits, transaction deposits and savings accounts	(1,626,196)		1,671,518
Net change in time deposits	(189,912)		37,228
Net change in other borrowed funds	(1,271,195)		(1,078,174)


Net proceeds on derivative liability contracts	(30,779)		8,437
Net change in derivative margin accounts	(1,274,645)		2,995
Change in amount due on unsettled available for sale securities transactions	(17,198)		(101,311)
Issuance of common and treasury stock, net	(4,907)		(4,866)

Repurchase of common stock	(48,074)		(20,071)
Dividends paid	(36,295)		(36,192)
Net cash provided by (used in) financing activities	(4,499,201)		479,564
Net increase (decrease) in cash and cash equivalents	(1,469,629)		238,623
Cash and cash equivalents at beginning of period	2,837,410		1,180,573
Cash and cash equivalents at end of period	$	1,367,781	$	1,419,196

Supplemental Cash Flow Information:
Cash paid for interest	$	13,982	$	16,743
Cash paid for taxes	$	858	$	852
Net loans and bank premises transferred to repossessed real estate and other assets	$	64	$	147
Residential mortgage loans guaranteed by U.S. government agencies that became eligible for repurchase during the period	$	12,568	$	36,496
Conveyance of other real estate owned guaranteed by U.S. government agencies	$	1,812	$	1,448
Right-of-use assets obtained in exchange for operating lease liabilities	$	9,241	$	1,191