Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Applicable Income Taxes Included in the Consolidated Statements Of Income

The following is a summary of applicable income taxes included in the Consolidated Statements of Income for the years ended December 31:


($ in millions)	2022		2021	2020
Current income tax expense:
U.S. Federal income taxes	$	570	657	463
State and local income taxes	126		102	69
Foreign income taxes	11		2	—
Total current income tax expense	707		761	532
Deferred income tax (benefit) expense:
U.S. Federal income taxes	(31)		(21)	(140)
State and local income taxes	(29)		8	(23)
Foreign income taxes	—		(1)	1
Total deferred income tax benefit	(60)		(14)	(162)
Applicable income tax expense	$	647	747	370

Reconciliation Between the Statutory U.S. Income Tax Rate and the Bancorp's Effective Tax Rate

The following is a reconciliation between the statutory U.S. Federal income tax rate and the Bancorp’s effective tax rate for the years ended December 31:


	2022		2021	2020
Statutory tax rate	21.0	%	21.0	21.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	2.5		2.5	2.0
Tax-exempt income	(0.8)		(0.6)	(1.5)
LIHTC investment and other tax benefits	(7.1)		(5.5)	(9.7)
LIHTC investment proportional amortization	6.1		4.6	8.3
Other tax credits	(0.4)		(0.2)	(0.4)
Other, net	(0.3)		(0.6)	0.9
Effective tax rate	21.0	%	21.2	20.6

Reconciliation of the Beginning and Ending Amounts of the Bancorp's Unrecognized Tax Benefits

The following table provides a reconciliation of the beginning and ending amounts of the Bancorp’s unrecognized tax benefits:


($ in millions)	2022		2021	2020
Unrecognized tax benefits at January 1	$	102	100	65
Gross increases for tax positions taken during prior period	3		10	29
Gross decreases for tax positions taken during prior period	(5)		(4)	(3)
Gross increases for tax positions taken during current period	11		11	12
Settlements with taxing authorities	—		—	(1)
Lapse of applicable statute of limitations	(17)		(15)	(2)
Unrecognized tax benefits at December 31(a)	$	94	102	100

(a)With the exception of $6 in 2020, all amounts represent unrecognized tax benefits that, if recognized, would affect the annual effective tax rate.

Deferred Income Taxes Included in Other Assets in the Consolidated Balance Sheets

Deferred income taxes are comprised of the following items at December 31:


($ in millions)	2022		2021
Deferred tax assets:
Other comprehensive income	$	1,595	$	—
Allowance for loan and lease losses	461		397
Deferred compensation	105		106
Reserves for unfunded commitments	45		38
Reserves	34		30
Federal net operating loss carryforwards	31		15
State deferred taxes	20		—
State net operating loss carryforwards	14		3
Other	231		187
Total deferred tax assets	$	2,536	$	776
Deferred tax liabilities:
Lease financing	$	561	$	553
MSRs and related economic hedges	120		116
Goodwill and intangible assets	78		68
Bank premises and equipment	66		65
Investments in joint ventures and partnership interests	61		61
Other comprehensive income	—		367
State deferred taxes	—		6
Other	101		51
Total deferred tax liabilities	$	987	$	1,287
Total net deferred tax asset (liability)	1,549		(511)