Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of 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	2025		2024		2023
Currently payable:
Federal	$	391	$	211	$	257
State	82		(3)		48
Total currently payable	$	473	$	208	$	305
Deferred:
Federal	$	(10)	$	(307)	$	(84)
State	13		(44)		(25)
Total deferred	3		(351)		(109)
Total income tax (benefit) expense (a)	$	476	$	(143)	$	196

(a)There was income tax (benefit) expense on securities transactions of $(1) million in 2025, $(445) million in 2024, and $(3) million in 2023. 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 $43 million in 2025, $32 million in 2024, and $34 million in 2023.

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

Significant components of our deferred tax assets and liabilities included in “accrued income and other assets” on our Consolidated Balance Sheets, are as follows:


December 31, Dollars in millions	2025		2024
Allowance for loan and lease losses	$	422	$	411
Employee benefits	212		209
Net unrealized securities losses	566		1,045
Federal tax credits	226		303

Non-tax accruals	79		109
Operating lease liabilities	121		127
State net operating losses and credits	5		20
Partnership investments	91		79
Other	137		149
Gross deferred tax assets	1,859		2,452
Less: Valuation Allowance	5		15
Total deferred tax assets	$	1,854	$	2,437

Leasing transactions	$	306	$	378
State taxes	25		76

Operating lease right-of-use assets	112		114
Goodwill	195		178
Other	67		68
Total deferred tax liabilities	705		814
Net deferred tax assets (liabilities) (a)	$	1,149	$	1,623

(a)From continuing operations.

Schedule of 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	2025				2024				2023
	Amount		Rate		Amount		Rate		Amount		Rate
Income (loss) before income taxes times 21% statutory federal tax rate	$	484	21.0	%	$	(64)	21.0	%	$	244	21.0	%
State and local income taxes, net of federal income tax effect(a)	75		3.3		(33)		10.8		13		1.1







Tax credits


Low-income housing/New markets	(252)		(10.9)		(211)		69.1		(196)		(16.9)
Change in valuation allowances	(2)		(.1)		3		(1.0)		—		—
Nontaxable or nondeductible items
Tax-exempt interest income	(27)		(1.2)		(27)		8.8		(35)		(3.0)
Corporate-owned life insurance income	(29)		(1.3)		(29)		9.5		(28)		(2.4)
Share-based compensation expense	(2)		(.1)		5		(1.6)		1		.1
Federal deposit insurance	20		.9		25		(8.2)		22		1.9

Amortization of tax-advantaged investments	212		9.2		185		(60.5)		171		14.7
Other permanent differences	(3)		(.1)		7		(2.4)		(1)		(.1)
Changes in reserves of tax positions	—		—		(4)		1.3		5		.4

Total income tax expense (benefit)	$	476	20.7	%	$	(143)	46.6	%	$	196	16.9	%

(a)In 2025, New York, New York City, California, and Illinois comprised the majority of the state and local income taxes, net of federal income tax effect. In 2024, New York, New York City, California, Illinois, and Oregon comprised the majority of this category. In 2023, New York, New York City, California, and Illinois comprised the majority of this category.

Schedule of Income Taxes Paid, Net of Refunds

The following table shows income taxes paid, net of refunds. Amounts presented for individual jurisdictions represented 5% or more of total income taxes paid, net of refunds, for each respective year.


Year ended December 31, Dollars in millions	2025		2024		2023
U.S. Federal	$	51	$	30	$	119
U.S. state and local
California	5		—		11
Illinois	—		4		—
New Jersey	—		6		—
New York City	7		—		9
New York State	—		—		(16)
Other	8		28		33
Total	$	71	$	68	$	156

Schedule of 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	2025		2024		2023
Balance at beginning of year	$	39	$	45	$	40
Increase for other tax positions of prior years	—		—		5
Decrease for payments and settlements	—		(3)		—
Decrease related to tax positions taken in prior years	(36)		(3)		—
Balance at end of year	$	3	$	39	$	45