Federal and State Income Taxes

12 Months Ended

Dec. 31, 2023

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,
	2023		2022
Deferred tax assets:
Available for sale securities mark to market	$	183,724	$	255,244
Credit loss reserves	76,361		69,385
Lease liability	61,204		49,839
Deferred compensation	41,350		34,645
Unearned fees	12,682		12,915
Purchased loan discount	3,546		4,955
Share-based compensation	6,068		4,625
Valuation adjustments	4,860		5,792
Other	47,169		42,808
Total deferred tax assets	436,964		480,208
Deferred tax liabilities:
Right-of-use asset	51,943		40,741
Mortgage servicing rights	47,646		49,001
Acquired identifiable intangible	8,166		11,280
Depreciation	4,578		7,163
Lease financing	12,148		12,333
Other	42,887		38,357
Total deferred tax liabilities	167,368		158,875
Net deferred tax assets	$	269,596	$	321,333

No valuation allowance was necessary on deferred tax assets as of December 31, 2023 and 2022.

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,
	2023		2022		2021
Current income tax expense:
Federal	$	152,600	$	127,144	$	121,196
State	19,298		18,185		21,065
Total current income tax expense	171,898		145,329		142,261
Deferred income tax expense (benefit):
Federal	(17,973)		(4,700)		29,777
State	(1,810)		(765)		7,737
Total deferred income tax expense (benefit)	(19,783)		(5,465)		37,514
Total income tax expense	$	152,115	$	139,864	$	179,775

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,
	2023		2022		2021
Amount:
Federal statutory tax	$	143,482	$	138,633	$	167,181
Tax exempt revenue	(5,786)		(5,714)		(6,084)
Effect of state income taxes, net of federal benefit	13,330		13,490		22,489
Utilization of tax credits, net of proportional amortization of low-income housing, new market, and historical tax credits	(2,673)		(8,883)		(8,801)
Other, net	3,762		2,338		4,990
Total income tax expense	$	152,115	$	139,864	$	179,775

	Year Ended December 31,
	2023		2022		2021
Percent of pretax income:
Federal statutory tax	21.0	%	21.0	%	21.0	%
Tax exempt revenue	(0.8)		(0.8)		(0.7)
Effect of state income taxes, net of federal benefit	2.0		2.0		2.8
Utilization of tax credits, net of proportional amortization of low-income housing, new market, and historical tax credits	(0.4)		(1.4)		(1.1)
Other, net	0.5		0.4		0.6
Total	22.3	%	21.2	%	22.6	%

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

	2023		2022		2021
Balance as of January 1	$	19,583	$	21,092	$	22,902
Additions for tax for current year positions	3,239		3,465		3,961
Settlements during the period	—		—		(1,754)
Lapses of applicable statute of limitations	(4,865)		(4,974)		(4,017)
Balance as of December 31	$	17,957	$	19,583	$	21,092

Of the above unrecognized tax benefits, $14.1 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 $1.6 million for 2023, $1.8 million for 2022 and $2.3 million for 2021 in interest and penalties. The Company had approximately $5.7 million and $6.0 million accrued for the payment of interest and penalties at December 31, 2023 and 2022, 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.