Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

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)		2011	2010	2009
Current income tax expense (benefit):
U.S. Federal income taxes	$	82	(5)	(157)
State and local income taxes		14	16	6
Foreign income taxes		0	-	(3)
Total current tax expense (benefit)		96	11	(154)
Deferred income tax expense (benefit):
U.S. Federal income taxes		411	165	190
State and local income taxes		26	11	(8)
Foreign income taxes		0	-	2
Total deferred income tax expense		437	176	184
Applicable income tax expense	$	533	187	30

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:

($ in millions)	2011		2010	2009
Statutory tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.4		1.8	(0.1)
Tax-exempt income	(1.4)		(3.6)	(18.7)
Credits	(7.3)		(14.1)	(14.6)
Goodwill	-		-	8.7
Interest to taxing authority, net of tax	-		(0.8)	(7.6)
Other changes in unrecognized tax benefits	-		(1.8)	0.0
Unrealized stock-based compensation benefits	1.3		2.5	0.6
Other, net	0.1		0.8	0.6
Effective tax rate	29.1	%	19.8	3.9

Summary of the Bancorp's Unrecognized Tax Benefits

The following table provides a summary of the Bancorp's unrecognized tax benefits as of December 31:

($ in millions)		2011	2010
Tax positions that would impact the effective tax rate, if recognized	$	14	15
Tax positions where the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of the deduction		-	1
Unrecognized tax benefits	$	14	16

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)		2011	2010	2009
Unrecognized tax benefits at January 1	$	16	82	959
Gross increases for tax positions taken during prior period		1	4	16
Gross decreases for tax positions taken during prior period		(2)	(23)	(329)
Gross increases for tax positions taken during current period		-	2	1
Settlements with taxing authorities		-	(48)	(563)
Lapse of applicable statute of limitations		(1)	(1)	(2)
Unrecognized tax benefits at December 31	$	14	16	82

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)		2011	2010
Deferred tax assets:
Allowance for loan and lease losses	$	789	1,051
Deferred compensation		119	136
Impairment reserves		102	144
Reserves		70	52
Reserve for unfunded commitments		63	79
State net operating losses		63	66
Other		216	221
Total deferred tax assets	$	1,422	1,749
Deferred tax liabilities:
Lease financing	$	853	801
Investments in joint ventures and partnership interests		468	481
Other comprehensive income		253	169
MSRs		173	190
Bank premises and equipment		95	69
State deferred taxes		74	53
Other		130	130
Total deferred tax liabilities	$	2,046	1,893
Total net deferred tax liability	$	(624)	(144)