
Note 11		Income Taxes

The components of income tax expense were:


	Three Months Ended June 30					Six Months Ended June 30
(Dollars in Millions)	2018		2017			2018		2017
Federal
Current	$	312	$	493		$	546	$	1,024
Deferred		17		(37	)		36		(157	)
Federal income tax		329		456			582		867
State
Current		62		81			154		146
Deferred		50		14			67		37
State income tax		112		95			221		183
Total income tax provision	$	441	$	551		$	803	$	1,050

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:


	Three Months Ended June 30						Six Months Ended June 30
(Dollars in Millions)	2018			2017			2018			2017
Tax at statutory rate	$	462		$	722		$	891		$	1,417
State income tax, at statutory rates, net of federal tax benefit		96			67			185			130
Tax effect of
Tax credits and benefits, net of related expenses		(132	)		(197	)		(247	)		(390	)
Exam resolutions		–			–			(49	)		–
Tax-exempt income		(33	)		(51	)		(65	)		(100	)
Noncontrolling interests		(2	)		(4	)		(3	)		(9	)
Other items		50			14			91			2
Applicable income taxes	$	441		$	551		$	803		$	1,050

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 June 30, 2018, 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 asset was $691 million at June 30, 2018 and $473 million at December 31, 2017.