Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

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)		2014	2013	2012
Current income tax expense:
U.S. Federal income taxes	$	424	494	327
State and local income taxes		34	23	38
Foreign income taxes		8	2	-
Total current tax expense		466	519	365
Deferred income tax expense (benefit):
U.S. Federal income taxes		71	232	252
State and local income taxes		9	23	19
Foreign income taxes		(1)	(2)	-
Total deferred income tax expense		79	253	271
Applicable income tax expense	$	545	772	636

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:
	2014		2013	2012
Statutory tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.4		1.2	1.7
Tax-exempt income	(1.4)		(1.1)	(2.1)
Credits	(8.1)		(6.0)	(6.7)
Unrealized stock-based compensation benefits	0.0		0.3	0.8
Other, net	0.0		0.3	0.1
Effective tax rate	26.9	%	29.7	28.8

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)		2014	2013	2012
Unrecognized tax benefits at January 1	$	7	18	14
Gross increases for tax positions taken during prior period		2	1	6
Gross decreases for tax positions taken during prior period		-	(7)	(3)
Gross increases for tax positions taken during current period		2	1	2
Settlements with taxing authorities		-	(5)	-
Lapse of applicable statute of limitations		-	(1)	(1)
Unrecognized tax benefits at December 31(a)	$	11	7	18

• 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)		2014	2013
Deferred tax assets:
Allowance for loan and lease losses	$	463	554
Deferred compensation		113	109
Reserves		96	101
Reserve for unfunded commitments		47	57
State net operating losses		18	22
Other		189	180
Total deferred tax assets	$	926	1,023
Deferred tax liabilities:
Lease financing	$	896	865
Investments in joint ventures and partnership interests		329	381
MSRs		237	254
Other comprehensive income		231	44
Qualifying hedges and free-standing derivatives		105	97
Bank premises and equipment		103	114
State deferred taxes		81	76
Other		148	130
Total deferred tax liabilities	$	2,130	1,961
Total net deferred tax liability	$	(1,204)	(938)