INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

The following table presents total income tax expense:


	Year Ended December 31,
(in millions)	2021	2020	2019
Income tax expense	$658	$241	$460
Tax effect of changes in OCI	(199)	112	225
Total comprehensive income tax expense	$459	$353	$685

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, 2021
U.S. federal	$871	($345)	$526
State and local	216	(84)	132
Total	$1,087	($429)	$658
Year Ended December 31, 2020
U.S. federal	$377	($181)	$196
State and local	102	(57)	45
Total	$479	($238)	$241
Year Ended December 31, 2019
U.S. federal	$323	$64	$387
State and local	73	—	73
Total	$396	$64	$460

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,
	2021			2020			2019
(in millions, except ratio data)	Amount	Rate		Amount	Rate		Amount	Rate
U.S. federal income tax expense and tax rate	$625	21.0	%	$273	21.0	%	$473	21.0	%
Increase (decrease) resulting from:
State and local income taxes (net of federal benefit)	126	4.2		54	4.2		73	3.2
Bank-owned life insurance	(14)	(0.5)		(12)	(0.9)		(12)	(0.5)
Tax-exempt interest	(7)	(0.2)		(10)	(0.7)		(15)	(0.7)
Tax advantaged investments (including related credits)	(95)	(3.2)		(68)	(5.3)		(50)	(2.3)
Other tax credits	(7)	(0.2)		(6)	(0.5)		(10)	(0.4)
Adjustments for uncertain tax positions	3	0.1		(1)	(0.1)		—	—
Non-deductible FDIC premiums	14	0.5		14	1.1		13	0.6
Legacy tax matters	—	—		(4)	(0.3)		(19)	(0.8)
Other	13	0.4		1	—		7	0.3
Total income tax expense and tax rate	$658	22.1	%	$241	18.5	%	$460	20.4	%

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)	2021	2020
Deferred tax assets:
Other comprehensive income	$227	$29
Allowance for credit losses	448	622
State net operating loss carryforwards	50	71
Accrued expenses not currently deductible	676	77
Investment and other tax credit carryforwards	110	99

Total deferred tax assets	1,511	898
Valuation allowance	(103)	(98)
Deferred tax assets, net of valuation allowance	1,408	800
Deferred tax liabilities:
Leasing transactions	331	459
Amortization of intangibles	379	376
Depreciation	256	262
Pension and other employee compensation plans	132	107
Partnerships	95	76
Deferred Income	85	62
MSRs	130	87
Total deferred tax liabilities	1,408	1,429
Net deferred tax liability	$—	$629

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)	2021	2020	2019
Balance at the beginning of the year	$4	$5	$8
Gross increase for tax positions related to current year	1	—	—
Gross increase for tax positions related to prior years	3	—	—
Gross decrease for tax positions related to prior years	—	—	(2)
Decrease for tax positions as a result of the lapse of the statutes of limitations	(1)	(1)	(1)
Decrease for tax positions related to settlements with taxing authorities	—	—	—
Balance at end of year	$7	$4	$5