INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

The following table presents total income tax expense:



	Year Ended December 31,
(in millions)	2019		2018			2017
Income tax expense		$460		$462			$260
Tax effect of changes in OCI	225		(96		)	(7		)
Total comprehensive income tax expense		$685		$366			$253

Schedule of Components of Income Tax Expense

The following table presents the components of income tax expense:



(in millions)	Current		Deferred			Total
Year Ended December 31, 2019
U.S. federal		$323		$64			$387
State and local	73		—			73
Total		$396		$64			$460
Year Ended December 31, 2018
U.S. federal		$271		$90			$361
State and local	94		7			101
Total		$365		$97			$462
Year Ended December 31, 2017
U.S. federal		$376		($142	)		$234
State and local	20		6			26
Total		$396		($136	)		$260

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation between the U.S. federal income tax rate and the Company’s effective income tax rate:



	Year Ended December 31,
	2019					2018					2017
(in millions, except ratio data)	Amount			Rate		Amount			Rate		Amount			Rate
U.S. federal income tax expense and tax rate		$473		21.0	%		$459		21.0	%		$669		35.0	%
Increase (decrease) resulting from:
Federal rate change	—			—		(34		)	(1.6	)	(331		)	(17.3	)
State and local income taxes (net of federal benefit)	73			3.2		89			4.1		46			2.4
Bank-owned life insurance	(12		)	(0.5	)	(12		)	(0.5	)	(19		)	(1.0	)
Tax-exempt interest	(15		)	(0.7	)	(15		)	(0.7	)	(21		)	(1.1	)
Tax advantaged investments (including related credits)	(50		)	(2.3	)	(44		)	(2.0	)	(51		)	(2.7	)
Other tax credits	(10		)	(0.4	)	(8		)	(0.4	)	(3		)	(0.1	)
Adjustments for uncertain tax positions	—			—		1			0.1		(23		)	(1.2	)
Non-deductible FDIC premiums	13			0.6		21			1.0		—			—
Legacy tax matters	(19		)	(0.8	)	—			—		—			—
Other	7			0.3		5			0.2		(7		)	(0.4	)
Total income tax expense and tax rate		$460		20.4	%		$462		21.2	%		$260		13.6	%

Schedule of Deferred Tax Assets and Liabilities

The following table presents the tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities:



	December 31,
(in millions)	2019			2018
Deferred tax assets:
Other comprehensive income		$141			$366
Allowance for credit losses	315			308
State net operating loss carryforwards	62			90
Accrued expenses not currently deductible	24			36
Investment and other tax credit carryforwards	89			74
Fair value adjustments	—			28
Total deferred tax assets	631			902
Valuation allowance	(79		)	(110		)
Deferred tax assets, net of valuation allowance	552			792
Deferred tax liabilities:
Leasing transactions	513			527
Amortization of intangibles	370			364
Depreciation	186			195
Pension and other employee compensation plans	124			127
Partnerships	71			51
Deferred Income	79			50
MSRs	75			51
Total deferred tax liabilities	1,418			1,365
Net deferred tax liability		$866			$573

Schedule of Unrecognized Tax Benefits Roll Forward

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits:



	December 31,
(in millions)	2019			2018		2017
Balance at the beginning of the year		$8			$5		$42
Gross increase for tax positions related to current year	—			3		—
Gross decrease for tax positions related to prior years	(2		)	—		(27		)
Decrease for tax positions as a result of the lapse of the statutes of limitations	(1		)	—		(1		)
Decrease for tax positions related to settlements with taxing authorities	—			—		(9		)
Balance at end of year		$5			$8		$5