Income Taxes (Tables)

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in Millions)	2025		2024		2025		2024
Federal
Current	$	332	$	144	$	588	$	645
Deferred	88		79		441		261
Federal income tax	420		223		1,029		906
State
Current	100		105		287		214
Deferred	4		22		123		22
State income tax	104		127		410		236
Total income tax provision	$	524	$	350	$	1,439	$	1,142

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 September 30				Nine Months Ended September 30
(Dollars in Millions)	2025		2024		2025		2024
Tax at statutory rate	$	532	$	435	$	1,467	$	1,218
State income tax, at statutory rates, net of federal tax benefit	119		106		330		289
Tax effect of
Tax credits and benefits, net of related expenses	(115)		(140)		(381)		(284)
Revaluation of tax related assets and liabilities(a)	—		—		72		—
Exam resolutions	(1)		(1)		(1)		(98)
Tax-exempt income	(39)		(38)		(112)		(105)
Other items	28		(12)		64		122
Applicable income taxes	$	524	$	350	$	1,439	$	1,142

(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.