Premises and Equipment and Leases

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Premises and Equipment Disclosure [Text Block]

Premises and Equipment and Leases

Premises and equipment at December 31 are summarized as follows (in thousands):

	December 31,
	2022		2021
Land	$	69,944	$	69,776
Buildings and improvements	469,001		472,450
Software and related integration	198,057		159,063
Furniture and equipment	201,830		186,092
Construction in progress	35,736		36,917
Premises and equipment	974,568		924,298
Less: Accumulated depreciation	409,393		350,150
Premises and equipment, net of accumulated depreciation	$	565,175	$	574,148

Depreciation expense of premises and equipment was $68.4 million, $63.4 million and $54.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Premises and equipment include right-of-use assets for leased office space and facilities. Leases are at market rates at inception and may contain escalations based on consumer price index or similar benchmarks and options to renew at then market rates.

Right-of-use assets of $177 million at December 31, 2022 and $181 million at December 31, 2021 are included in buildings and improvements, and related right-of-use liabilities are included in other liabilities. At December 31, 2022, the weighted-average remaining lease term was 10.2 years and the weighted average discount rate on operating leases was 2.9%.

At December 31, 2022, undiscounted operating lease liabilities are scheduled to mature as follows (in thousands):

2023	$	27,130
2024	26,894
2025	26,092
2026	25,306
2027	22,925
Thereafter	115,983
Total undiscounted lease payments	244,330
Less: Interest	32,278
Lease liabilities	$	212,052

Total lease expense for BOK Financial was $41.7 million in 2022, $35.8 million in 2021 and $42.0 million in 2020. Rent expense and right-of-use asset amortization recognized as occupancy and equipment expense was $24.5 million in 2022, $23.4 million in 2021 and $25.0 million in 2020. Operating cash flows from operating leases were $23.3 million, $25.3 million and $25.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Operating expenses related to leased assets and short term lease costs totaled $13.0 million, $11.5 million and $13.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

BOKF, NA is obligated under a long-term lease for its bank premises in downtown Tulsa. The original lease dated November 1, 1976 was renegotiated on July 1, 2019. The new lease will terminate on December 31, 2034. The Company has the option to renew for an additional 10 years. Premises leases may include options to renew at then current market rates and may include escalation provisions based upon changes in consumer price index or similar benchmarks.

The Company may lease owned properties or sublease unoccupied leased facilities. Income on these leases is immaterial.