INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Allocation of Income Taxes

The following table details the total income tax provision/(benefit) allocation for each respective period.

	Year ended September 30,
$ in millions	2020		2019		2018
Recorded in:
Net income (1)	$	234	$	341	$	454
Equity, arising from available-for-sale securities recorded through OCI	23		27		(19)
Equity, arising from currency translations, net of the impact of net investment hedges recorded through OCI	2		7		10
Equity, arising from cash flow hedges recorded through OCI	(12)		(23)		15
Total provision for income taxes	$	247	$	352	$	460

(1)    Our provision for income taxes for the year ended September 30, 2018 included $105 million related to the enactment of the Tax Cuts and Jobs Act (“Tax Act”) in December 2017, primarily due to the remeasurement of U.S. deferred tax assets at a lower enacted federal corporate tax rate.

Provision (Benefit) for Income Taxes

The following table details our provision/(benefit) for income taxes included in net income for each respective period.

	Year ended September 30,
$ in millions	2020		2019		2018
Current:
Federal	$	215	$	286	$	258
State and local	49		63		65
Foreign	9		15		14
Total current	273		364		337
Deferred:
Federal	(36)		(22)		121
State and local	(3)		(1)		(4)
Total deferred	(39)		(23)		117
Total provision for income taxes	$	234	$	341	$	454

Reconciliation Between Income Tax Expense and the Amount Computed by Applying the Statutory Federal Income Tax Rate

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is detailed in the following table.

	Year ended September 30,
	2020		2019		2018
Provision calculated at statutory rate	21.0	%	21.0	%	24.5	%
Impact of Tax Act	—		0.1	%	8.1	%
State income tax, net of federal benefit	3.6	%	3.6	%	3.9	%
Excess tax benefits related to share-based compensation	(0.6)	%	(0.4)	%	(0.9)	%
Gains on company-owned life insurance policies which are not subject to tax	(1.0)	%	(0.1)	%	(0.7)	%
Federal tax credits	(1.1)	%	(0.9)	%	(0.7)	%
Other, net	0.3	%	1.5	%	0.6	%
Total provision for income tax	22.2	%	24.8	%	34.8	%

U.S. and Foreign Components of Income Before Income Taxes

The following table presents our U.S. and foreign components of pre-tax income for each respective period.

	Year ended September 30,
$ in millions	2020		2019		2018
U.S.	$	1,019	$	1,340	$	1,268
Foreign	33		35		43
Pre-tax income	$	1,052	$	1,375	$	1,311

Deferred Tax Asset (Liability) Items

The cumulative effects of temporary differences that give rise to significant portions of the deferred tax asset/(liability) items are detailed in the following table.

	September 30,
$ in millions	2020		2019
Deferred tax assets:
Deferred compensation	$	229	$	192
Allowances for loan losses and reserves for unfunded commitments	89		56
Unrealized loss associated with foreign currency translations	8		10
Unrealized loss associated with cash flow hedges	18		6
Accrued expenses	34		35
Partnership investments	13		12
Lease liabilities	80		—
Other	16		12
Total deferred tax assets	487		323
Deferred tax liabilities:
Goodwill and identifiable intangible assets	(34)		(28)
Property and equipment	(81)		(57)
Lease ROU assets	(80)		—
Unrealized gain associated with available-for-sale securities	(30)		(7)
Total deferred tax liabilities	(225)		(92)
Net deferred tax assets	$	262	$	231

Aggregate Changes in Liability for Unrecognized Tax Benefits

The following table presents the aggregate changes in the balances for uncertain tax positions.

	Year ended September 30,
$ in millions	2020		2019		2018
Uncertain tax positions beginning of year	$	42	$	31	$	20
Increases for tax positions related to the current year	5		11		5
Increases for tax positions related to prior years	3		7		10
Decreases for tax positions related to prior years	(1)		—		(1)
Decreases due to lapsed statute of limitations	(4)		(2)		(3)
Decreases related to settlements	—		(5)		—
Uncertain tax positions end of year	$	45	$	42	$	31