Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes

Applicable Income Taxes Included in the Consolidated Statements Of Income

The Bancorp and its subsidiaries file a consolidated federal income tax return.The following is a summary of applicable income taxes included in the Consolidated Statements of Income for the years ended December 31:

($ in millions)		2013	2012	2011
Current income tax expense (benefit):
U.S. Federal income taxes	$	494	327	82
State and local income taxes		23	38	14
Foreign income taxes		2	-	-
Total current tax expense		519	365	96
Deferred income tax expense
U.S. Federal income taxes		232	252	411
State and local income taxes		23	19	26
Foreign income taxes		(2)	-	-
Total deferred income tax expense		253	271	437
Applicable income tax expense	$	772	636	533

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)	2013		2012	2011
Statutory tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.2		1.7	1.4
Tax-exempt income	(1.1)		(2.1)	(1.4)
Credits	(6.0)		(6.7)	(7.3)
Unrealized stock-based compensation benefits	0.3		0.8	1.3
Other, net	0.3		0.1	0.1
Effective tax rate	29.7	%	28.8	29.1

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)		2013	2012
Tax positions that would impact the effective tax rate, if recognized	$	7	18
Tax positions where the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of the deduction		-	-
Unrecognized tax benefits	$	7	18

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)		2013	2012	2011
Unrecognized tax benefits at January 1	$	18	14	16
Gross increases for tax positions taken during prior period		1	6	1
Gross decreases for tax positions taken during prior period		(7)	(3)	(2)
Gross increases for tax positions taken during current period		1	2	-
Settlements with taxing authorities		(5)	-	-
Lapse of applicable statute of limitations		(1)	(1)	(1)
Unrecognized tax benefits at December 31	$	7	18	14

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)		2013	2012
Deferred tax assets:
Allowance for loan and lease losses	$	554	649
Deferred compensation		109	105
Reserves		101	63
Reserve for unfunded commitments		57	47
Impairment reserves		31	74
State net operating losses		22	33
Other		149	191
Total deferred tax assets	$	1,023	1,162
Deferred tax liabilities:
Lease financing	$	865	844
Investments in joint ventures and partnership interests		381	470
MSRs		254	162
Bank premises and equipment		114	108
Qualifying hedges and free-standing derivatives		97	31
State deferred taxes		76	64
Other comprehensive income		44	202
Other		130	124
Total deferred tax liabilities	$	1,961	2,005
Total net deferred tax liability	$	(938)	(843)