Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

The components of income tax expense were:


Year Ended December 31 (Dollars in Millions)	2024		2023		2022
Federal
Current	$	1,272	$	1,434	$	1,366
Deferred	(6)		(326)		(108)
Federal income tax	1,266		1,108		1,258
State
Current	279		482		401
Deferred	35		(183)		(196)
State income tax	314		299		205
Total income tax provision	$	1,580	$	1,407	$	1,463

Reconciliation of Expected Income Tax Expense at Federal Statutory Rate to the Applicable Income Tax Expense

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax expense follows:


Year Ended December 31 (Dollars in Millions)	2024		2023		2022
Tax at statutory rate	$	1,661	$	1,442	$	1,533
State income tax, at statutory rates, net of federal tax benefit	385		322		305
Tax effect of
Tax credits and benefits, net of related expenses	(393)		(272)		(273)
Tax-exempt income	(144)		(142)		(121)
Exam Resolutions	(106)		(35)		—
Revaluation of tax related assets and liabilities(a)	(8)		15		(79)
Nondeductible legal and regulatory expenses	57		76		37
Other items	128		1		61
Applicable income taxes	$	1,580	$	1,407	$	1,463

(a)The 2022 acquisition of MUB resulted in an increase in the Company’s state effective tax rate, requiring the Company to revalue its state deferred tax assets and liabilities. As a result of this revaluation, the Company recorded an estimated net tax benefit of $79 million during 2022.

Reconciliation of Changes Unrecognized Tax Positions

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:


Year Ended December 31 (Dollars in Millions)	2024		2023		2022
Balance at beginning of period	$	350	$	513	$	487
Additions for tax positions taken in prior years	32		141		35
Additions for tax positions taken in the current year	6		3		3
Exam resolutions	(131)		(302)		(8)
Statute expirations	(1)		(5)		(4)
Balance at end of period	$	256	$	350	$	513

Significant Components of the Net Deferred Tax Asset (Liability)

The significant components of the Company’s net deferred tax asset (liability) follows:


At December 31 (Dollars in Millions)	2024		2023
Deferred Tax Assets
Securities available-for-sale and financial instruments	$	3,129	$	3,231
Federal, state and foreign net operating loss, credit carryforwards and other carryforwards	2,772		2,836
Allowance for credit losses	2,086		2,051
Loans	869		1,013
Accrued expenses	767		838
Obligation for operating leases	341		348
Partnerships and other investment assets	264		271
Stock compensation	89		87
Other deferred tax assets, net	383		370
Gross deferred tax assets	10,700		11,045
Deferred Tax Liabilities
Goodwill and other intangible assets	(1,362)		(1,450)
Leasing activities	(1,273)		(1,455)
Mortgage servicing rights	(789)		(758)
Right of use operating leases	(297)		(301)
Pension and postretirement benefits	(184)		(115)
Fixed assets	(28)		(44)
Other deferred tax liabilities, net	(125)		(168)
Gross deferred tax liabilities	(4,058)		(4,291)
Valuation allowance	(389)		(364)
Net Deferred Tax Asset	$	6,253	$	6,390