Income Taxes And Tax-Related Items Income Taxes And Tax-Related Items (Tables)

12 Months Ended

Dec. 31, 2016

Current and Deferred Components of the Provision for Income Taxes

The current and deferred components of the provision for income taxes were as follows:



(in millions)
December 31	2016			2015			2014
Current:
Federal	$	224		$	275		$	127
Foreign	5			5			6
State and local	15			20			14
Total current	244			300			147
Deferred:
Federal	(49		)	(68		)	123
State and local	(2		)	(3		)	7
Total deferred	(51		)	(71		)	130
Total	$	193		$	229		$	277

Reconciliation of Expected Income Tax Expense at the Federal Statutory Rate to the Provision for Income Taxes

A reconciliation of expected income tax expense at the federal statutory rate to the Corporation’s provision for income taxes and effective tax rate follows:



(dollar amounts in millions)	2016					2015					2014
Years Ended December 31	Amount			Rate		Amount			Rate		Amount			Rate
Tax based on federal statutory rate	$	235		35.0	%	$	262		35.0	%	$	305		35.0	%
State income taxes	8			1.2		10			1.3		13			1.5
Affordable housing and historic credits	(22		)	(3.3	)	(22		)	(2.9	)	(24		)	(2.8	)
Bank-owned life insurance	(15		)	(2.3	)	(15		)	(2.0	)	(15		)	(1.7	)
Other changes in unrecognized tax benefits	—			—		—			—		2			0.2
Lease termination transactions	(15		)	(2.2	)	(5		)	(0.7	)	—			—
Tax-related interest and penalties	3			0.5		1			0.1		(3		)	(0.3	)
Other	(1		)	(0.1	)	(2		)	(0.3	)	(1		)	(0.1	)
Provision for income taxes	$	193		28.8	%	$	229		30.5	%	$	277		31.8	%

Reconciliation of Beginning and Ending Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of net unrecognized tax benefits follows:



(in millions)	2016			2015		2014
Balance at January 1	$	22		$	14	$	11
Increases as a result of tax positions taken during a prior period	—			8		3
Decrease related to settlements with tax authorities	(7		)	—		—
Balance at December 31	$	15		$	22	$	14

Tax Years Remaining Open for Examination for Significant Tax Jurisdictions

The following tax years for significant jurisdictions remain subject to examination as of December 31, 2016:



Jurisdiction	Tax Years
Federal	2013-2015
California	2004-2015

Principal Components of Deferred Tax Assets and Liabilities

The principal components of deferred tax assets and liabilities were as follows:



(in millions)
December 31	2016			2015
Deferred tax assets:
Allowance for loan losses	$	256		$	223
Deferred compensation	91			113
Deferred loan origination fees and costs	20			24
Net unrealized losses on investment securities available-for-sale	20			—
Other temporary differences, net	76			69
Total deferred tax asset before valuation allowance	463			429
Valuation allowance	(3		)	(3		)
Total deferred tax assets	460			426
Deferred tax liabilities:
Lease financing transactions	(150		)	(183		)
Defined benefit plans	(82		)	(32		)
Net unrealized gains on investment securities available-for-sale	—			(5		)
Allowance for depreciation	(11		)	(7		)
Total deferred tax liabilities	(243		)	(227		)
Net deferred tax asset	$	217		$	199