Income Taxes (Tables) - Federal

12 Months Ended

Dec. 31, 2019

Schedule of Income Tax Disclosure

Components of the Provision (Benefit) for Income Taxes

Components of the provision for income taxes consist of the following:

	For the Years Ended December 31,
	2019			2018			2017
	(Dollars in millions)
Current
Federal	$	17		$	—		$	2
State	6			1			—
Total current income tax expense	23			1			2
Deferred
Federal	39			47			66
Federal impact of tax reform	—			—			80
State	(14		)	(3		)	—
Total deferred income tax expense	25			44			146
Total income tax expense	$	48		$	45		$	148

Summary of Differences Between the Effective Tax Rate and the Statutory Federal Tax Rate

Our effective tax rate differs from the statutory federal tax rate. The following is a summary of such differences:

	For the Years Ended December 31,
	2019			2018			2017
	(Dollars in millions)
Provision at statutory federal income tax rate (1)	$	56		$	49		$	74
(Decreases) increases resulting from:
Bank owned life insurance	(2		)	(2		)	(3		)
State income tax (benefit), net of federal income tax effect (net of valuation allowance release)	(6		)	(2		)	—
Low income housing tax losses	(1		)	(1		)
Tax reform	—			—			80
Other	1			1			(3		)
Provision for income taxes	$	48		$	45		$	148
Effective tax provision rate	18.1		%	19.4		%	70.1		%

(1)

The statutory federal income tax rate was 21 percent for the years ended December 31, 2019 and December 31, 2018 and 35 percent for the year ended December 31, 2017

Temporary Differences and Carryforwards Giving Rise to DTAs and Liabilities

Temporary differences and carry forwards that give rise to DTAs and liabilities are comprised of the following:

	December 31,
	2019			2018
	(Dollars in millions)
Deferred tax assets
Net operating loss carryforwards (Federal and State)	$	43		$	58
Allowance for loan losses	26			30
Accrued compensation	12			10
Litigation settlement	9			14
Lease liability	6			—
Contingent consideration	4			3
General business credits	—			7
General business reserves	2			10
Other	11			11
Total	$	113		$	143
Valuation allowance	(5		)	(14		)
Total net	$	108		$	129
Deferred tax liabilities
Mark-to-market adjustments	$	(12	)	$	(11	)
Premises and equipment	(7		)	(8		)
State and local taxes	(7		)	(3		)
Commercial lease financing	(5		)	(4		)
Mortgage loan servicing rights	(5		)	—
Right of use asset	(6		)	—
Total	$	(42	)	$	(26	)
Net deferred tax asset	$	66		$	103