Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

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)		2017	2016	2015
Current income tax expense:
U.S. Federal income taxes	$	763	598	662
State and local income taxes		68	55	55
Foreign income taxes		(3)	-	13
Total current income tax expense		828	653	730
Deferred income tax benefit:
U.S. Federal income taxes		(252)	(133)	(78)
State and local income taxes		1	(14)	6
Foreign income taxes		-	(1)	1
Total deferred income tax benefit		(251)	(148)	(71)
Applicable income tax expense	$	577	505	659

Reconciliation Between the Statutory U.S. Income Tax Rate and the Bancorp's Effective Tax Rate

The following is a reconciliation between the federal statutory corporate tax rate and the Bancorp’s effective tax rate for the years ended December 31:

	2017		2016	2015
Federal statutory corporate tax rate	35.0	%	35.0	35.0
Increase (decrease) resulting from:
State taxes, net of federal benefit	1.6		1.3	1.7
Tax-exempt income	(1.2)		(2.7)	(1.7)
Low-income housing tax credits	(6.0)		(7.9)	(6.6)
Other tax credits	(0.5)		(0.9)	(0.9)
U.S. tax legislation impact on deferred taxes	(7.9)		-	-
Other, net	(0.2)		(0.4)	0.3
Effective tax rate	20.8	%	24.4	27.8

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)		2017	2016	2015
Unrecognized tax benefits at January 1	$	24	13	11
Gross increases for tax positions taken during prior period		17	9	1
Gross decreases for tax positions taken during prior period		(1)	-	-
Gross increases for tax positions taken during current period		3	2	2
Settlements with taxing authorities		(7)	-	-
Lapse of applicable statute of limitations		(2)	-	(1)
Unrecognized tax benefits at December 31^(a)	$	34	24	13

(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)		2017	2016
Deferred tax assets:
Allowance for loan and lease losses	$	251	439
Deferred compensation		77	122
Reserve for unfunded commitments		34	56
Reserves		29	57
State net operating loss carryforwards		9	9
Other		102	223
Total deferred tax assets	$	502	906
Deferred tax liabilities:
Lease financing	$	616	940
MSRs and related economic hedges		111	202
State deferred taxes		64	64
Bank premises and equipment		42	61
Investments in joint ventures and partnership interests		34	219
Other comprehensive income		21	34
Other		137	173
Total deferred tax liabilities	$	1,025	1,693
Total net deferred tax liability	$	(523)	(787)