Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Federal
Current	$	1,162		$	1,287		$	2,086
Deferred		166			(148	)		(1,180	)
Federal income tax		1,328			1,139			906
State
Current		379			395			201
Deferred		(59	)		20			157
State income tax		320			415			358
Total income tax provision	$	1,648		$	1,554		$	1,264

Reconciliation of Expected Income Tax Expense at Federal Statutory Rate of 21 Percent and 35 Percent to Company's Applicable Income Tax Expense

A reconciliation of expected income tax expense at the federal statutory rate of 21 percent for 2019 and 2018 and 35 percent for 2017 to the Company’s applicable income tax expense follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Tax at statutory rate	$	1,805		$	1,822		$	2,631
State income tax, at statutory rates, net of federal tax benefit		355			352			281
Tax effect of
Revaluation of tax related assets and liabilities(a)		—			—			(910	)
Tax credits and benefits, net of related expenses		(424	)		(513	)		(774	)
Tax-exempt income		(120	)		(130	)		(200	)
Nondeductible legal and regulatory expenses		23			52			213
Other items(b)		9			(29	)		23
Applicable income taxes	$	1,648		$	1,554		$	1,264

(a) In late 2017, tax legislation was enacted that, among other provisions, reduced the federal statutory rate for corporations from 35 percent to 21 percent effective in 2018. In accordance with generally accepted accounting principles, the Company revalued its deferred tax assets and liabilities at December 31, 2017, resulting in an estimated net tax benefit of $910 million, which the Company recorded in 2017.

(b) Includes excess tax benefits associated with stock-based compensation and adjustments related to deferred tax assets and liabilities.

Reconciliation of Changes in Federal, State and Foreign Unrecognized Tax Position Balances

A reconciliation of the changes in the federal, state and foreign uncertain tax position balances are summarized as follows:

Year Ended December 31 (Dollars in Millions)	2019			2018			2017
Balance at beginning of period	$	335		$	287		$	302
Additions for tax positions taken in prior years		168			93			3
Additions for tax positions taken in the current year		6			10			9
Exam resolutions		(62	)		(51	)		(23	)
Statute expirations		(15	)		(4	)		(4	)
Balance at end of period	$	432		$	335		$	287

Significant Components of the Company's Net Deferred Tax Asset (Liability)

The significant components of the Company’s net deferred tax asset (liability) follows:

At December 31 (Dollars in Millions)	2019			2018
Deferred Tax Assets
Federal, state and foreign net operating loss and credit carryforwards	$	2,592		$	2,699
Allowance for credit losses		1,155			1,141
Accrued expenses		485			508
Obligation for operating leases		328			—
Pension and postretirement benefits		193			85
Partnerships and other investment assets		91			69
Stock compensation		78			79
Fixed assets		2			58
Securities available-for-sale and financial instruments		—			278
Other deferred tax assets, net		257			268
Gross deferred tax assets		5,181			5,185
Deferred Tax Liabilities
Leasing activities		(2,700	)		(2,652	)
Goodwill and other intangible assets		(763	)		(703	)
Mortgage servicing rights		(546	)		(642	)
Right of use assets		(282	)		—
Loans		(139	)		(168	)
Securities available-for-sale and financial instruments		(111	)		—
Other deferred tax liabilities, net		(131	)		(102	)
Gross deferred tax liabilities		(4,672	)		(4,267	)
Valuation allowance		(127	)		(109	)
Net Deferred Tax Asset	$	382		$	809