Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Table - Federal Income Tax (Expense) Benefit

The table below presents the components of our federal income tax expense for the past three years. We are exempt from state and local income taxes.

Table 13.1 - Federal Income Tax Expense


	Year Ended December 31,
(In millions)	2025	2024	2023
Current income tax expense	($2,673)	($3,862)	($1,003)
Deferred income tax expense	43	942	(1,658)
Total income tax expense	($2,630)	($2,920)	($2,661)

Table - Reconciliation of Statutory to Effective Tax Rate

The table below presents the reconciliation between our federal statutory income tax rate and our effective tax rate for the past three years.

Table 13.2 - Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate


	Year Ended December 31,
	2025			2024			2023
(Dollars in millions)	Amount	Percent		Amount	Percent		Amount	Percent
Statutory corporate tax rate	($2,806)	21.0	%	($3,103)	21.0	%	($2,772)	21.0	%
Nontaxable or nondeductible items	85	(0.6)		72	(0.5)		30	(0.2)
Tax credits	88	(0.7)		111	(0.7)		65	(0.5)
Changes in valuation allowances	3	—		—	—		16	(0.1)
Effective tax rate	($2,630)	19.7	%	($2,920)	19.8	%	($2,661)	20.2	%

Table - Deferred Tax Assets and Liabilities

The table below presents the balance of significant deferred tax assets and liabilities at December 31, 2025 and December 31, 2024. The valuation allowance relates to capital loss carryforwards included in Other items, net that we expect to expire unused.

Table 13.3 - Deferred Tax Assets and Liabilities


(In millions)	December 31, 2025	December 31, 2024
Deferred tax assets:
Deferred fees	$1,557	$1,699
Basis differences related to derivative instruments	294	437
Credit-related items and allowance for loan losses	1,460	1,360
Basis differences related to assets held-for-investment and held-for-sale	1,180	980
Basis differences related to fair value hedge accounting	150	—
Other items, net	448	606
Total deferred tax assets	5,089	5,082
Deferred tax liabilities:
Basis differences related to fair value hedge accounting	—	(30)
Unrealized gains related to available-for-sale securities	(35)	(17)
Total deferred tax liabilities	(35)	(47)
Valuation allowance	(14)	(17)
Deferred tax assets, net	$5,040	$5,018