Income Taxes (Tables)

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in Millions)	2025		2024		2025		2024
Federal
Current	$	257	$	321	$	256	$	501
Deferred	25		49		353		182
Federal income tax	282		370		609		683
State
Current	90		88		187		109
Deferred	100		(13)		119		—
State income tax	190		75		306		109
Total income tax provision	$	472	$	445	$	915	$	792

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:

	Three Months Ended June 30				Six Months Ended June 30
(Dollars in Millions)	2025		2024		2025		2024
Tax at statutory rate	$	482	$	432	$	935	$	783
State income tax, at statutory rates, net of federal tax benefit	99		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 items	2		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.