Note 11

Income Taxes

The components of income tax expense were:


	Three Months Ended March 31,
(Dollars in Millions)	2016		2015
Federal
Current	$	301	$	380
Deferred		107		20
Federal income tax		408		400
State
Current		90		84
Deferred		6		(5	)
State income tax		96		79
Total income tax provision	$	504	$	479

A reconciliation of expected income tax expense at the federal statutory rate of 35 percent to the Company’s applicable income tax expense follows:


	Three Months Ended March 31,
(Dollars in Millions)	2016			2015
Tax at statutory rate	$	667		$	673
State income tax, at statutory rates, net of federal tax benefit		63			51
Tax effect of
Tax credits and benefits, net of related expenses		(166	)		(164	)
Tax-exempt income		(50	)		(52	)
Noncontrolling interests		(5	)		(4	)
Other items (a)		(5	)		(25	)
Applicable income taxes	$	504		$	479

(a)

Includes the resolution of certain tax matters with taxing authorities in the first quarter of 2015.

The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of March 31, 2016, the federal taxing authority has completed its examination of the Company through the fiscal year ended December 31, 2010. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax liability was $1.6 billion at March 31, 2016, and $1.5 billion at December 31, 2015.