INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

The following table presents total income tax expense:


	Year Ended December 31,
(in millions)	2022	2021	2020
Income tax expense	$582	$658	$241
Tax effect of changes in OCI	(1,319)	(199)	112
Total comprehensive income tax expense (benefit)	($737)	$459	$353

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, 2022
U.S. federal	$355	$88	$443
State and local	170	(31)	139
Total	$525	$57	$582
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

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,
	2022			2021			2020
(in millions, except ratio data)	Amount	Rate		Amount	Rate		Amount	Rate
U.S. federal income tax expense and tax rate	$558	21.0	%	$625	21.0	%	$273	21.0	%
Increase (decrease) resulting from:
State and local income taxes (net of federal benefit)	133	5.0		126	4.2		54	4.2
Bank-owned life insurance	(19)	(0.7)		(14)	(0.5)		(12)	(0.9)
Tax-exempt interest	(8)	(0.3)		(7)	(0.2)		(10)	(0.7)
Tax advantaged investments (including related credits)	(102)	(3.8)		(95)	(3.2)		(68)	(5.3)
Other tax credits	(9)	(0.3)		(7)	(0.2)		(6)	(0.5)
Adjustments for uncertain tax positions	1	—		3	0.1		(1)	(0.1)
Non-deductible FDIC premiums	20	0.7		14	0.5		14	1.1
Legacy tax matters	3	0.1		—	—		(4)	(0.3)
Other	5	0.2		13	0.4		1	—
Total income tax expense and tax rate	$582	21.9	%	$658	22.1	%	$241	18.5	%

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)	2022	2021
Deferred tax assets:
Other comprehensive income	$1,546	$227
Allowance for credit losses	511	448
Federal and state net operating and capital loss carryforwards	77	50
Accrued expenses not currently deductible	863	676
Investment and other tax credit carryforwards	131	110
Other	19	—
Total deferred tax assets	3,147	1,511
Valuation allowance	(133)	(103)
Deferred tax assets, net of valuation allowance	3,014	1,408
Deferred tax liabilities:
Leasing transactions	287	331
Amortization of intangibles	413	379
Depreciation	470	256
Pension and other employee compensation plans	128	132
Partnerships	87	95
Deferred Income	12	85
MSRs	203	130
Total deferred tax liabilities	1,600	1,408
Net deferred tax asset (liability)	$1,414	$—

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)	2022	2021	2020
Balance at the beginning of the year	$7	$4	$5
Gross increase for tax positions related to current year	—	1	—
Gross increase for tax positions related to prior years	—	3	—

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	(1)	—	—
Balance at end of year	$6	$7	$4