Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Applicable Income Taxes Included in the Consolidated Statements Of Income

($ in millions)		2012	2011	2010
Current income tax expense (benefit):
U.S. Federal income taxes	$	327	82	(5)
State and local income taxes		38	14	16
Total current tax expense		365	96	11
Deferred income tax expense
U.S. Federal income taxes		252	411	165
State and local income taxes		19	26	11
Total deferred income tax expense		271	437	176
Applicable income tax expense	$	636	533	187

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)	2012		2011	2010
Statutory tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.7		1.4	1.8
Tax-exempt income	(2.1)		(1.4)	(3.6)
Credits	(6.7)		(7.3)	(14.1)
Interest to taxing authority, net of tax	-		-	(0.8)
Other changes in unrecognized tax benefits	-		-	(1.8)
Unrealized stock-based compensation benefits	0.8		1.3	2.5
Other, net	0.1		0.1	0.8
Effective tax rate	28.8	%	29.1	19.8

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)		2012	2011
Tax positions that would impact the effective tax rate, if recognized	$	18	14
Tax positions where the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of the deduction		-	-
Unrecognized tax benefits	$	18	14

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)		2012	2011	2010
Unrecognized tax benefits at January 1	$	14	16	82
Gross increases for tax positions taken during prior period		6	1	4
Gross decreases for tax positions taken during prior period		(3)	(2)	(23)
Gross increases for tax positions taken during current period		2	-	2
Settlements with taxing authorities		-	-	(48)
Lapse of applicable statute of limitations		(1)	(1)	(1)
Unrecognized tax benefits at December 31	$	18	14	16

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)		2012	2011
Deferred tax assets:
Allowance for loan and lease losses	$	649	789
Deferred compensation		105	119
Impairment reserves		74	102
Reserves		63	70
Reserve for unfunded commitments		47	63
State net operating losses		33	63
Other		191	216
Total deferred tax assets	$	1,162	1,422
Deferred tax liabilities:
Lease financing	$	844	853
Investments in joint ventures and partnership interests		470	468
Other comprehensive income		202	253
MSRs		162	173
Bank premises and equipment		108	95
State deferred taxes		64	74
Other		155	130
Total deferred tax liabilities	$	2,005	2,046
Total net deferred tax liability	$	(843)	(624)