Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes Included in Income Statement

Income taxes included in the income statement are summarized below. We file a consolidated federal income tax return.

Year ended December 31, Dollars in millions	2021		2020		2019
Currently payable:
Federal	$	423	$	336	$	241
State	73		83		20
Total currently payable	496		419		261
Deferred:
Federal	119		(156)		34
State	27		(36)		19
Total deferred	146		(192)		53
Total income tax (benefit) expense (a)	$	642	$	227	$	314

(a)There was income tax (benefit) expense on securities transactions of $(2) million in 2021, $1 million in 2020, and $5 million in 2019. Income tax expense excludes equity- and gross receipts-based taxes, which are assessed in lieu of an income tax in certain states in which we operate. These non-income taxes, which are recorded in “noninterest expense” on the income statement, totaled $33 million in 2021, $30 million in 2020, and $23 million in 2019.

Significant Components of Deferred Tax Assets and Liabilities Included in "Accrued Income and Other Assets" and "Accrued Expense and Other Liabilities"

Significant components of our deferred tax assets and liabilities included in “accrued expense and other liabilities” on the balance sheet, are as follows:

December 31, Dollars in millions	2021		2020
Allowance for loan and lease losses	$	296	$	443
Employee benefits	203		166
Net unrealized securities losses	102		—
Federal net operating losses and credits	6		7
Non-tax accruals	73		76
Operating lease liabilities (a)	165		174
State net operating losses and credits	1		1
Other	266		297
Gross deferred tax assets	1,112		1,164
Less: Valuation Allowance	12		—
Total deferred tax assets	1,100		1,164
Leasing transactions	521		556
Net unrealized securities gains	—		340
Operating lease right-of-use assets (a)	145		153
Goodwill	121		104
Other	124		111
Total deferred tax liabilities	911		1,264
Net deferred tax assets (liabilities) (b)	$	189	$	(100)

(a)A separate deferred tax asset and liability is recognized for each operating lease item resulting from the adoption of ASC 842 in 2019.

(b)From continuing operations.

Total Income Tax Expense (Benefit) and Resulting Effective Tax Rate

The following table shows how our total income tax expense (benefit) and the resulting effective tax rate were derived:

Year ended December 31, Dollars in millions	2021				2020				2019
	Amount		Rate		Amount		Rate		Amount		Rate
Income (loss) before income taxes times 21% statutory federal tax rate	$	683	21.0	%	$	327	21.0	%	$	425	21.0	%
Amortization of tax-advantaged investments	151		4.6		150		9.7		132		6.5
Tax-exempt interest income	(26)		(.8)		(28)		(1.8)		(30)		(1.5)
Corporate-owned life insurance income	(27)		(.8)		(29)		(1.9)		(29)		(1.4)
State income tax, net of federal tax benefit	79		2.4		37		2.4		31		1.5
Tax credits	(218)		(6.7)		(218)		(14.0)		(231)		(11.4)
Other	—		—		(12)		(.8)		16		.9
Total income tax expense (benefit)	$	642	19.7	%	$	227	14.6	%	$	314	15.6	%

Change in Liability for Unrecognized Tax Benefits

The change in our liability for unrecognized tax benefits is as follows:

Year ended December 31, Dollars in millions	2021		2020
Balance at beginning of year	$	58	$	19
Increase for other tax positions of prior years	—		40
Decrease for payments and settlements	—		—
Decrease related to tax positions taken in prior years	(8)		(1)
Balance at end of year	$	50	$	58