Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

Year Ended December 31 (Dollars in Millions)	2022			2021		2020
Federal
Current	$	1,366		$	1,203	$	1,146
Deferred		(108	)		469		(291	)
Federal income tax		1,258			1,672		855
State
Current		401			398		355
Deferred		(196	)		111		(144	)
State income tax		205			509		211
Total income tax provision	$	1,463		$	2,181	$	1,066

Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent to Company's 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)	2022			2021			2020
Tax at statutory rate	$	1,533		$	2,135		$	1,271
State income tax, at statutory rates, net of federal tax benefit		305			439			240
Tax effect of
Tax credits and benefits, net of related expenses		(273	)		(331	)		(370	)
Tax-exempt income		(121	)		(114	)		(117	)
Revaluation of tax related assets and liabilities(a)		(79	)		—			—
Nondeductible legal and regulatory expenses		37			24			29
Other items		61			28			13
Applicable income taxes	$	1,463		$	2,181		$	1,066

(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 in Federal, State and Foreign Unrecognized Tax Position Balances

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)	2022			2021			2020
Balance at beginning of period	$	487		$	474		$	432
Additions for tax positions taken in prior years		35			14			62
Additions for tax positions taken in the current year		3			7			6
Exam resolutions		(8	)		(1	)		(8	)
Statute expirations		(4	)		(7	)		(18	)
Balance at end of period	$	513		$	487		$	474

Significant Components of the Company's Net Deferred Tax Asset (Liability)

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

At December 31 (Dollars in Millions)	2022			2021
Deferred Tax Assets
Securities available-for-sale and financial instruments	$	3,992		$	163
Federal, state and foreign net operating loss, credit carryforwards and other carryforwards		2,677			2,331
Allowance for credit losses		1,980			1,561
Loans		1,287			—
Accrued expenses		618			568
Obligation for operating leases		368			281
Partnerships and other investment assets		112			—
Stock compensation		81			76
Pension and postretirement benefits		—			8
Other deferred tax assets, net		501			451
Gross deferred tax assets		11,616			5,439
Deferred Tax Liabilities
Leasing activities		(1,813	)		(2,263	)
Goodwill and other intangible assets		(1,575	)		(845	)
Mortgage servicing rights		(815	)		(593	)
Right of use operating leases		(325	)		(246	)
Pension and postretirement benefits		(172	)		—
Fixed assets		(125	)		(238	)
Loans		—			(85	)
Partnerships and other investment assets		—			(8	)
Other deferred tax liabilities, net		(234	)		(127	)
Gross deferred tax liabilities		(5,059	)		(4,405	)
Valuation allowance		(263	)		(249	)
Net Deferred Tax Asset	$	6,294		$	785