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Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 11Income Taxes
The components of income tax expense were:
 Three Months Ended
June 30		Six Months Ended
June 30
(Dollars in Millions)2025202420252024
Federal
Current$257 $321 $256 $501 
Deferred25 49 353 182 
Federal income tax282 370 609 683 
State
Current90 88 187 109 
Deferred100 (13)119 — 
State income tax190 75 306 109 
Total income tax provision$472 $445 $915 $792 
A reconciliation of expected income tax expense at the federal statutory rate of 21 percent to the Company’s applicable income tax expense follows:
 Three Months Ended
June 30		Six Months Ended
June 30
(Dollars in Millions)2025202420252024
Tax at statutory rate$482 $432 $935 $783 
State income tax, at statutory rates, net of federal tax benefit99 102 211 183 
Tax effect of
Tax credits and benefits, net of related expenses(143)(83)(266)(144)
Revaluation of tax related assets and liabilities(a)
72 — 72 — 
Exam resolutions— (32)— (97)
Tax-exempt income(40)(36)(73)(67)
Other items2 62 36 134 
Applicable income taxes$472 $445 $915 $792 
(a)California enacted legislation resulting in a decrease to 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 expense of $72 million in the second quarter of 2025.
The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of June 30, 2025, federal tax examinations for all years ending through December 31, 2020 are completed and resolved. The Company’s tax returns for the years ended December 31, 2021 through December 31, 2022 are under examination by the Internal Revenue Service. The years open to examination by foreign, state and local government authorities vary by jurisdiction.
The Company’s net deferred tax asset was $5.4 billion at June 30, 2025 and $6.3 billion at December 31, 2024.