Federal and State Income Taxes

12 Months Ended

Dec. 31, 2021

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,
	2021		2020
Deferred tax assets:
Credit loss reserves	$	67,339	$	101,265
Lease liability	48,457		44,794
Deferred compensation	33,945		29,504
Unearned fees	11,368		14,584
Purchased loan discount	7,498		11,537
Share-based compensation	5,989		6,525
Valuation adjustments	1,883		3,834
Other	28,958		29,963
Total deferred tax assets	205,437		242,006
Deferred tax liabilities:
Available for sale securities mark to market	21,841		105,769
Right-of-use asset	41,291		38,635
Mortgage servicing rights	31,703		24,182
Acquired identifiable intangible	14,307		18,138
Depreciation	10,939		13,754
Lease financing	11,120		11,828
Other	39,698		39,210
Total deferred tax liabilities	170,899		251,516
Net deferred tax assets (liabilities)	$	34,538	$	(9,510)

No valuation allowance was necessary on deferred tax assets as of December 31, 2021 and 2020.

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,
	2021		2020		2019
Current income tax expense:
Federal	$	121,196	$	173,888	$	110,887
State	21,065		29,889		15,088
Total current income tax expense	142,261		203,777		125,975
Deferred income tax expense (benefit):
Federal	29,777		(65,989)		3,416
State	7,737		(8,995)		792
Total deferred income tax expense (benefit)	37,514		(74,984)		4,208
Total income tax expense	$	179,775	$	128,793	$	130,183

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,
	2021		2020		2019
Amount:
Federal statutory tax	$	167,181	$	118,412	$	132,482
Tax exempt revenue	(6,084)		(7,035)		(12,227)
Effect of state income taxes, net of federal benefit	22,489		14,251		12,715
Utilization of tax credits, net of proportional amortization of low-income housing limited partnership investments	(8,801)		(6,994)		(5,127)
Other, net	4,990		10,159		2,340
Total income tax expense	$	179,775	$	128,793	$	130,183

	Year Ended December 31,
	2021		2020		2019
Percent of pretax income:
Federal statutory tax	21.0	%	21.0	%	21.0	%
Tax exempt revenue	(0.7)		(1.2)		(1.9)
Effect of state income taxes, net of federal benefit	2.8		2.5		2.0
Utilization of tax credits, net of proportional amortization of low-income housing limited partnership investments	(1.1)		(1.2)		(0.8)
Other, net	0.6		1.7		0.3
Total	22.6	%	22.8	%	20.6	%

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

	2021		2020		2019
Balance as of January 1	$	22,902	$	20,465	$	18,869
Additions for tax for current year positions	3,961		6,384		5,649
Settlements during the period	(1,754)		—		—
Lapses of applicable statute of limitations	(4,017)		(3,947)		(4,053)
Balance as of December 31	$	21,092	$	22,902	$	20,465

Of the above unrecognized tax benefits, $16.4 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 $2.3 million for 2021, $2.4 million for 2020 and $2.2 million for 2019 in interest and penalties. The Company had approximately $6.4 million and $5.9 million accrued for the payment of interest and penalties at December 31, 2021 and 2020, 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.