Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

INCOME TAXES

The components of income tax expense are as follows:

Table 87: Components of Income Tax Expense

Year ended December 31 In millions	2019		2018		2017
Current
Federal	$	608	$	773	$	454
State	151		176		51
Total current	759		949		505
Deferred
Federal	299		123		(474		)
State	4		10		71
Total deferred	303		133		(403		)
Total	$	1,062	$	1,082	$	102

Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows:

Table 88: Deferred Tax Assets and Liabilities

December 31 – in millions	2019			2018
Deferred tax assets
Allowance for loan and lease losses	$	661		$	637
Compensation and benefits	270			279
Partnership investments	120			184
Loss and credit carryforward	203			366
Accrued expenses	195			207
Lease obligations	545
Other	161			193
Total gross deferred tax assets	2,155			1,866
Valuation allowance	(31		)	(37		)
Total deferred tax assets	2,124			1,829
Deferred tax liabilities
Leasing	1,703			1,169
Goodwill and intangibles	194			196
Fixed assets	412			379
Mortgage servicing rights	99			179
Net unrealized gains on securities and financial instruments	401
BlackRock basis difference	1,845			1,726
Other	176			119
Total deferred tax liabilities	4,830			3,768
Net deferred tax liability	$	2,706		$	1,939

Reconciliation of Statutory and Effective Tax Rates

A reconciliation between the statutory and effective tax rates follows:

Table 89: Reconciliation of Statutory and Effective Tax Rates

Year ended December 31	2019		2018		2017
Statutory tax rate	21.0	%	21.0	%	35.0	%
Increases (decreases) resulting from:
State taxes net of federal benefit	2.1		2.3		1.5
Tax-exempt interest	(1.2	)	(1.4	)	(2.5	)
Life insurance	(.9	)	(.9	)	(1.8	)
Dividend received deduction	(1.0	)	(.9	)	(1.8	)
Tax credits	(3.5	)	(3.4	)	(4.2	)
Federal deferred tax revaluation			(1.7	)	(21.7	)
Unrecognized tax benefits			1.1		(.1	)
Other	(.1	)	.7		(2.5	)
Effective tax rate	16.4	%	16.8	%	1.9	%

Net Operating Loss Carryforwards

The net operating loss carryforwards at December 31, 2019 and 2018 follow

Table 90: Net Operating Loss Carryforwards

Dollars in millions	December 31, 2019		December 31, 2018		Expiration
Net Operating Loss Carryforwards:
Federal	$	402	$	521	2032
State	$	1,197	$	1,577	2020-2039

Change in Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

Table 91: Change in Unrecognized Tax Benefits

In millions	2019			2018			2017
Balance of gross unrecognized tax benefits at January 1	$	207		$	18		$	22
Increases:
Positions taken during a prior period				212			4
Decreases:
Positions taken during a prior period	(77		)	(16		)	(3		)
Settlements with taxing authorities				(7		)	(4		)
Reductions resulting from lapse of statute of limitations							(1		)
Balance of gross unrecognized tax benefits at December 31	$	130		$	207		$	18
Favorable (unfavorable) impact if recognized	$	76		$	76		$	17

IRS Tax Examination Status

Table 92: IRS Tax Examination Status

	Years under examination	Status at December 31
Federal	2016 – 2017	Under Exam