Reportable Segments

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Reportable Segments [Text Block]

(17)  Reportable Segments

BOK Financial operates 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 to small businesses, middle market and larger commercial customers. Commercial Banking also includes the TransFund EFT network. Consumer Banking includes retail lending and deposit services and all mortgage banking activities. Wealth Management provides fiduciary services, brokerage and trading, private bank services and investment advisory services in all markets. Wealth Management also originates loans for high net worth clients.

In addition to its lines of business, BOK Financial has a Funds Management unit. The primary purpose of this unit is to manage the 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. 

BOK Financial allocates resources and evaluates performance of its lines of business after allocation of funds, certain indirect expenses, taxes based on statutory rates, actual net credit losses and capital costs. 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 duration. Market rates are generally based on the applicable LIBOR or interest rate swap rates, adjusted for prepayment risk. This method of transfer-pricing funds that support assets of the operating lines of business tends to insulate them from interest rate risk.

The value of funds provided by the operating lines of business to the Funds Management unit is based on rates which approximate the wholesale market rates for funds with similar duration and re-pricing characteristics. Market rates are generally based on LIBOR or interest rate swap rates. The funds credit formula applied to deposit products with indeterminate maturities is established based on their re-pricing characteristics reflected in a combination of the short-term LIBOR rates and a moving average of an intermediate term swap rate, with an appropriate spread applied to both. Shorter duration products are weighted towards the short-term LIBOR rate and longer duration products are weighted towards 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 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.

Substantially all revenue is from domestic customers. No single external customer accounts for more than 10% of total revenue.

Net loans charged off and provision for credit losses represents net loans charged off as attributed to the lines of business and the provision for credit losses in excess of net charge-offs attributed to Funds Management and Other.

Reportable segments reconciliation to the Consolidated Financial Statements for the year ended December 31, 2013 is as follows (in thousands):

	Commercial			Consumer			Wealth Management			Funds Management and Other			BOK Financial Consolidated
Net interest revenue from external sources	$	364,604		$	99,509		$	25,478		$	184,886		$	674,477
Net interest revenue (expense) from internal sources	(37,025		)	20,290			20,061			(3,326		)	—
Net interest revenue	327,579			119,799			45,539			181,560			674,477
Provision for credit losses	(3,468		)	4,628			1,275			(30,335		)	(27,900		)
Net interest revenue after provision for credit losses	331,047			115,171			44,264			211,895			702,377
Other operating revenue	171,900			216,828			213,790			11,954			614,472
Other operating expense	244,211			226,852			237,540			132,017			840,620
Income before taxes	258,736			105,147			20,514			91,832			476,229
Federal and state income tax	100,648			40,902			7,980			7,768			157,298
Net income	158,088			64,245			12,534			84,064			318,931
Net income attributable to non-controlling interest	—			—			—			2,322			2,322
Net income attributable to BOK Financial Corp.	$	158,088		$	64,245		$	12,534		$	81,742		$	316,609
Average assets	$	10,483,706		$	5,669,580		$	4,556,132		$	6,671,676		$	27,381,094
Average invested capital	906,716			293,736			203,914			1,606,716			3,011,082
Performance measurements:
Return on average assets	1.51		%	1.13		%	0.28		%				1.16		%
Return on average invested capital	17.44		%	21.87		%	6.15		%				10.51		%
Efficiency ratio	49.18		%	66.62		%	91.92		%				65.03		%

Reportable segments reconciliation to the Consolidated Financial Statements for the year ended December 31, 2012 is as follows (in thousands):

	Commercial			Consumer			Wealth Management			Funds Management and Other			BOK Financial Consolidated
Net interest revenue from external sources	$	367,533		$	101,029		$	27,647		$	211,340		$	707,549
Net interest revenue (expense) from internal sources	(43,438		)	21,305			21,456			677			—
Net interest revenue	324,095			122,334			49,103			212,017			707,549
Provision for credit losses	10,852			9,198			2,284			(44,334		)	(22,000		)
Net interest revenue after provision for credit losses	313,243			113,136			46,819			256,351			729,549
Other operating revenue	171,131			262,908			200,007			19,632			653,678
Other operating expense	246,954			248,767			214,293			130,349			840,363
Income before taxes	237,420			127,277			32,533			145,634			542,864
Federal and state income tax	92,356			49,511			12,655			34,218			188,740
Net income	145,064			77,766			19,878			111,416			354,124
Net income attributable to non-controlling interest	—			—			—			2,933			2,933
Net income attributable to BOK Financial Corp.	$	145,064		$	77,766		$	19,878		$	108,483		$	351,191
Average assets	$	10,147,805		$	5,726,564		$	4,357,641		$	6,057,140		$	26,289,150
Average invested capital	882,037			289,665			184,707			1,549,546			2,905,955
Performance measurements:
Return on average assets	1.43		%	1.36		%	0.46		%				1.34		%
Return on average invested capital	16.45		%	26.85		%	10.76		%				12.09		%
Efficiency ratio	51.36		%	63.97		%	86.23		%				62.87		%

Reportable segments reconciliation to the Consolidated Financial Statements for the year ended December 31, 2011 is as follows (in thousands):

	Commercial			Consumer			Wealth Management			Funds Management and Other			BOK Financial Consolidated
Net interest revenue from external sources	$	342,853		$	102,854		$	30,859		$	216,479		$	693,045
Net interest revenue (expense) from internal sources	(30,689		)	27,416			16,540			(13,267		)	—
Net interest revenue	312,164			130,270			47,399			203,212			693,045
Provision for credit losses	20,760			13,598			2,960			(43,368		)	(6,050		)
Net interest revenue after provision for credit losses	291,404			116,672			44,439			246,580			699,095
Other operating revenue	147,545			182,875			171,827			26,291			528,538
Other operating expense	230,458			239,302			190,702			118,836			779,298
Income before taxes	208,491			60,245			25,564			154,035			448,335
Federal and state income tax	81,103			23,435			9,944			44,029			158,511
Net income	127,388			36,810			15,620			110,006			289,824
Net income attributable to non-controlling interest	—			—			—			3,949			3,949
Net income attributable to BOK Financial Corp.	$	127,388		$	36,810		$	15,620		$	106,057		$	285,875
Average assets	$	9,383,530		$	5,937,584		$	4,073,623		$	5,100,124		$	24,494,861
Average invested capital	884,171			273,905			174,877			1,348,912			2,681,865
Performance measurements:
Return on average assets	1.36		%	0.62		%	0.38		%				1.17		%
Return on average invested capital	14.41		%	13.44		%	8.93		%				10.66		%
Efficiency ratio	50.22		%	73.06		%	87.21		%				63.83		%