Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense are as follows:

Table 101: Components of Income Tax Expense                         

Year ended December 31 In millions	2023		2022		2021
Current
Federal	$	1,021	$	782	$	894
State	320		227		191
Total current	1,341		1,009		1,085
Deferred
Federal	(149)		307		123
State	(103)		44		55
Total deferred	(252)		351		178
Total	$	1,089	$	1,360	$	1,263

Deferred Tax Assets and Liabilities

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

Table 102: Deferred Tax Assets and Liabilities                    

December 31 – in millions	2023		2022
Deferred tax assets
Net unrealized losses on securities and financial instruments	$	2,417	$	3,107
Allowance for loan and lease losses	1,147		1,152
Lease obligations	508		548
Compensation and benefits	261		369
Allowance for unfunded lending related commitments	161		170
Accrued expenses	209		78
Other	384		350
Total gross deferred tax assets	5,087		5,774
Valuation allowance	(26)		(27)
Total deferred tax assets	5,061		5,747
Deferred tax liabilities
Leasing	938		1,034
Fixed assets	477		589
Right of Use Assets	445		472
Mortgage servicing rights	359		325
Goodwill and intangibles	252		270
Other	461		405
Total deferred tax liabilities	2,932		3,095
Net deferred tax asset	$	2,129	$	2,652

Reconciliation of Statutory and Effective Tax Rates

A reconciliation between the statutory and effective tax rates follows:

Table 103: Reconciliation of Statutory and Effective Tax Rates

Year ended December 31	2023		2022		2021
Statutory tax rate	21.0	%	21.0	%	21.0	%
Increases (decreases) resulting from:
State taxes net of federal benefit	2.9		2.7		2.6
Tax-exempt interest	(1.7)		(1.2)		(0.9)
Life insurance	(0.9)		(0.8)		(0.8)
Tax credits	(5.2)		(3.2)		(4.4)
Other	0.1		(0.3)		0.6
Effective tax rate	16.2	%	18.2	%	18.1	%

Net Operating Loss Carryforwards

The net operating loss carryforwards at December 31, 2023 and 2022 follow

Table 104: Net Operating Loss Carryforwards

Dollars in millions	December 31, 2023		December 31, 2022		Expiration
Net Operating Loss Carryforwards:
Federal			$	45	N/A
State	$	624	$	698	2024-2042

Change in Unrecognized Tax Benefits

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

Table 105: Change in Unrecognized Tax Benefits

In millions	2023		2022		2021
Balance of gross unrecognized tax benefits at January 1	$	318	$	275	$	265
Increases:
Positions taken during a current period	20
Acquired unrecognized tax benefits					8
Positions taken during a prior period	35		46		7
Decreases:
Positions taken during a prior period					(2)
Settlements with taxing authorities	(4)		(3)		(3)
Reductions resulting from lapse of statute of limitations	(1)
Balance of gross unrecognized tax benefits at December 31	$	368	$	318	$	275
Favorable impact if recognized	$	306	$	258	$	217

IRS Tax Examination Status

Table 106: IRS Tax Examination Status

	Year(s)		Status at December 31, 2023
	PNC Financial Services Group, Inc.	BBVA USA Bancshares, Inc.
Federal	2020-2021	2018	Under Exam