Federal, State, and Local Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Deferred Tax Assets and Liabilities

The following table summarizes the components of the Company’s net deferred tax asset (liability) at December 31, 2023 and 2022:


	December 31,
(in millions)	2023		2022
Deferred Tax Assets:
Allowance for credit losses on loans and leases	$	253	$	102
Acquisition accounting and fair value adjustments on securities (including OTTI)	188		227
Acquisition accounting and fair value adjustments on loans	—		36
Capitalized loan costs			46
Right of Use Liability	32		—
Compensation and related benefit obligations	30		23
Capitalized research and development costs	—		10
Accrued Expenses	19		—
Net operating loss carryforwards	8		15
Other	22		18
Gross deferred tax assets	552		477
Valuation allowance	(5)		(5)
Net deferred tax asset after valuation allowance	$	547	$	472
Deferred Tax Liabilities:
Leases	$	(492)	$	(328)
Mortgage servicing rights	(79)		(105)
Premises and equipment	(44)		(18)
Prepaid pension cost	(35)		(29)
Fair value adjustments on loans	(210)		—
Amortizable intangibles	(127)		(71)
Acquisition accounting and fair value adjustments on deposits	(2)		(9)
Right of Use Asset	(32)		—
Deferred Loan fees	(13)		—
Acquisition accounting and fair value adjustments on debt	(9)		(10)
Other	(21)		(9)
Gross deferred tax liabilities	$	(1,064)	$	(579)
Net deferred tax liability	$	(517)	$	(107)

Components of the Provision (Benefit) for Income Taxes

The following table summarizes the Company’s income tax expense for the years ended December 31, 2023, 2022, and 2021:


	December 31,
(in millions)	2023		2022		2021
Federal – current	$	156	$	147	$	188
State and local – current	59		32		35
Total current	215		179		223
Federal – deferred	(137)		(10)		(28)
State and local – deferred	(49)		7		15
Total deferred	(186)		(3)		(13)
Income tax expense reported in net income	29		176		210
Income tax expense reported in stockholders’ equity related to:
Securities available-for-sale	15		(223)		(42)
Pension liability adjustments	6		(6)		10
Cash flow hedge	(14)		23		9

Total income taxes	$	36	$	(30)	$	187

Summary of Differences Between the Effective Tax Rate and the Statutory Federal Tax Rate

The following table presents a reconciliation of statutory federal income tax expense (benefit) to combined actual income tax expense (benefit) reported in net income for the years ended December 31, 2023, 2022, and 2021:


	December 31,
(in millions)	2023		2022		2021
Statutory federal income tax at 21%	$	(10)	$	174	$	169
State and local income taxes, net of federal income tax effect	8		31		40
Tax Exempt income	$	(6)	$	—	$	—
Non-taxable bargain gain	(447)		(33)		—
Non-deductible goodwill impairment	$	509	$	—	$	—
Non-deductible FDIC deposit insurance premiums	16		10		9
Effect of tax deductibility of deferred compensation	$	(3)	$	(3)	$	(3)
Non-taxable income and expense of BOLI	(9)		(7)		(6)
Non-deductible merger expenses	$	—	$	3	$	3
Non-deductible compensation expense	1		4		—
Federal tax credits	$	(31)	$	(1)	$	—
Adjustments relating to prior tax years	2		(1)		(1)
Other, net	(1)		(1)		(1)
Total income tax expense	$	29	$	176	$	210

Summary of Income Tax Contingencies

The following table summarizes changes in the liability for unrecognized gross tax benefits for the years ended December 31, 2023, 2022, and 2021:


	December 31,
(in millions)	2023		2022		2021
Uncertain tax positions at beginning of year	$	40	$	39	$	38
Additions for tax positions relating to current-year operations	1		1		2
Additions for tax positions relating to prior tax years	2		—		1
Subtractions for tax positions relating to prior tax years	(1)		—		(2)
Uncertain tax positions at end of year	$	42	$	40	$	39