Federal and State Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Federal and State Income Taxes [Text Block]

Federal and State Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2022		2021
Deferred tax assets:
Available for sale securities mark to market	$	255,244	$	—
Credit loss reserves	69,385		67,339
Lease liability	49,839		48,457
Deferred compensation	34,645		33,945
Unearned fees	12,915		11,368
Purchased loan discount	4,955		7,498
Share-based compensation	4,625		5,989
Valuation adjustments	5,792		1,883
Other	42,808		28,958
Total deferred tax assets	480,208		205,437
Deferred tax liabilities:
Right-of-use asset	40,741		41,291
Mortgage servicing rights	49,001		31,703
Available for sale securities mark to market	—		21,841
Acquired identifiable intangible	11,280		14,307
Depreciation	7,163		10,939
Lease financing	12,333		11,120
Other	38,357		39,698
Total deferred tax liabilities	158,875		170,899
Net deferred tax assets (liabilities)	$	321,333	$	34,538

No valuation allowance was necessary on deferred tax assets as of December 31, 2022 and 2021.

The significant components of the provision for income taxes attributable to continuing operations for BOK Financial are shown below (in thousands):

	Year Ended December 31,
	2022		2021		2020
Current income tax expense:
Federal	$	127,144	$	121,196	$	173,888
State	18,185		21,065		29,889
Total current income tax expense	145,329		142,261		203,777
Deferred income tax expense (benefit):
Federal	(4,700)		29,777		(65,989)
State	(765)		7,737		(8,995)
Total deferred income tax expense (benefit)	(5,465)		37,514		(74,984)
Total income tax expense	$	139,864	$	179,775	$	128,793

The reconciliations of income attributable to continuing operations at the U.S. federal statutory tax rate to income tax expense are as follows (in thousands):

	Year Ended December 31,
	2022		2021		2020
Amount:
Federal statutory tax	$	138,633	$	167,181	$	118,412
Tax exempt revenue	(5,714)		(6,084)		(7,035)
Effect of state income taxes, net of federal benefit	13,490		22,489		14,251
Utilization of tax credits, net of proportional amortization of low-income housing limited partnership investments	(8,883)		(8,801)		(6,994)
Other, net	2,338		4,990		10,159
Total income tax expense	$	139,864	$	179,775	$	128,793

	Year Ended December 31,
	2022		2021		2020
Percent of pretax income:
Federal statutory tax	21.0	%	21.0	%	21.0	%
Tax exempt revenue	(0.8)		(0.7)		(1.2)
Effect of state income taxes, net of federal benefit	2.0		2.8		2.5
Utilization of tax credits, net of proportional amortization of low-income housing limited partnership investments	(1.4)		(1.1)		(1.2)
Other, net	0.4		0.6		1.7
Total	21.2	%	22.6	%	22.8	%

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	2022		2021		2020
Balance as of January 1	$	21,092	$	22,902	$	20,465
Additions for tax for current year positions	3,465		3,961		6,384
Settlements during the period	—		(1,754)		—
Lapses of applicable statute of limitations	(4,974)		(4,017)		(3,947)
Balance as of December 31	$	19,583	$	21,092	$	22,902

Of the above unrecognized tax benefits, $15.3 million, if recognized, would have affected the effective tax rate.

BOK Financial recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. The Company recognized $1.8 million for 2022, $2.3 million for 2021 and $2.4 million for 2020 in interest and penalties. The Company had approximately $6.0 million and $6.4 million accrued for the payment of interest and penalties at December 31, 2022 and 2021, respectively. Federal statutes remain open for federal tax returns filed in the previous three reporting periods. Various state income tax statutes remain open for the previous three to six reporting periods.