Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

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)		2016	2015	2014
Current income tax expense:
U.S. Federal income taxes	$	598	662	424
State and local income taxes		55	55	34
Foreign income taxes		-	13	8
Total current income tax expense		653	730	466
Deferred income tax (benefit) expense:
U.S. Federal income taxes		(133)	(78)	71
State and local income taxes		(14)	6	9
Foreign income taxes		(1)	1	(1)
Total deferred income tax (benefit) expense		(148)	(71)	79
Applicable income tax expense	$	505	659	545

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:

	2016		2015	2014
Statutory tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.3		1.7	1.4
Tax-exempt income	(2.7)		(1.7)	(1.4)
Low-income housing tax credits	(7.9)		(6.6)	(7.0)
Other tax credits	(0.9)		(0.9)	(1.1)
Other, net	(0.4)		0.3	-
Effective tax rate	24.4	%	27.8	26.9

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)		2016	2015	2014
Unrecognized tax benefits at January 1	$	13	11	7
Gross increases for tax positions taken during prior period		9	1	2
Gross decreases for tax positions taken during prior period		-	-	-
Gross increases for tax positions taken during current period		2	2	2
Settlements with taxing authorities		-	-	-
Lapse of applicable statute of limitations		-	(1)	-
Unrecognized tax benefits at December 31^(a)	$	24	13	11

(a) 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)		2016	2015
Deferred tax assets:
Allowance for loan and lease losses	$	439	445
Deferred compensation		122	118
Reserves		57	61
Reserve for unfunded commitments		56	48
State net operating loss carryforwards		9	10
Other		223	194
Total deferred tax assets	$	906	876
Deferred tax liabilities:
Lease financing	$	940	935
Investments in joint ventures and partnership interests		219	248
MSRs and related economic hedges		202	245
State deferred taxes		64	79
Bank premises and equipment		61	53
Other comprehensive income		34	106
Other		173	218
Total deferred tax liabilities	$	1,693	1,884
Total net deferred tax liability	$	(787)	(1,008)