Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense from continuing operations are as follows:

Table 108: Components of Income Tax Expense                         

Year ended December 31 In millions	2021		2020		2019
Current
Federal	$	894	$	669	$	570
State	191		158		152
Total current	$	1,085	$	827	$	722
Deferred
Federal	123		(373)		187
State	55		(28)		(8)
Total deferred	$	178	$	(401)	$	179
Total	$	1,263	$	426	$	901

Deferred Tax Assets and Liabilities

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

Table 109: Deferred Tax Assets and Liabilities                     

December 31 – in millions	2021		2020
Deferred tax assets
Allowance for loan and lease losses	$	1,170	$	1,288
Allowance for unfunded lending related commitments	161		141
Compensation and benefits	290		227
Partnership investments	73		121
Loss and credit carryforward	140		162
Accrued expenses	151		107
Lease obligations	563		528
Other	238		163
Total gross deferred tax assets	2,786		2,737
Valuation allowance	(33)		(26)
Total deferred tax assets	2,753		2,711
Deferred tax liabilities
Leasing	1,023		1,179
Right of Use Assets	488		476
Goodwill and intangibles	278		193
Fixed assets	704		592
Net unrealized gains on securities and financial instruments	120		929
Other	343		143
Total deferred tax liabilities	2,956		3,512
Net deferred tax liability	$	203	$	801

Reconciliation of Statutory and Effective Tax Rates

A reconciliation between the statutory and effective tax rates from continuing operations follows:

Table 110: Reconciliation of Statutory and Effective Tax Rates

Year ended December 31	2021		2020		2019
Statutory tax rate	21.0	%	21.0	%	21.0	%
Increases (decreases) resulting from:
State taxes net of federal benefit	2.6		2.0		2.3
Tax-exempt interest	(0.9)		(1.7)		(1.5)
Life insurance	(0.8)		(1.6)		(1.0)
Tax credits	(4.4)		(6.0)		(4.2)
Unrecognized tax benefits	0.3		(1.6)		(0.1)
Subsidiary liquidation			(1.2)
Other	0.3		1.5		(0.1)
Effective tax rate	18.1	%	12.4	%	16.4	%

Net Operating Loss Carryforwards

The net operating loss carryforwards at December 31, 2021 and 2020 follow

Table 111: Net Operating Loss Carryforwards

Dollars in millions	December 31, 2021		December 31, 2020		Expiration
Net Operating Loss Carryforwards:
Federal	$	166	$	282	2030-2032
State	$	872	$	848	2022-2039

Change in Unrecognized Tax Benefits

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

Table 112: Change in Unrecognized Tax Benefits

In millions	2021		2020		2019
Balance of gross unrecognized tax benefits at January 1	$	265	$	130	$	207
Increases:
Positions taken during a current period			265
Acquired unrecognized tax benefits	8
Positions taken during a prior period	7
Decreases:
Positions taken during a prior period	(2)				(77)
Settlements with taxing authorities	(3)		(130)
Balance of gross unrecognized tax benefits at December 31	$	275	$	265	$	130
Favorable impact if recognized	$	217	$	209	$	76

IRS Tax Examination Status

Table 113: IRS Tax Examination Status

	Years under examination		Status at December 31, 2021
	PNC Financial Services Group, Inc.	BBVA USA Bancshares, Inc.
Federal	2019	2018	Under Exam