INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense

Federal and state income tax expense consist of the following:

TABLE 20.1

Year Ended December 31	2023		2022		2021
(in millions)
Current income taxes:
Federal taxes	$	93	$	94	$	79
State taxes	12		9		4
Total current income taxes	105		103		83
Deferred income taxes:
Federal taxes	(8)		9		12
State taxes	2		2		3
Total deferred income taxes	(6)		11		15
Total income taxes	$	99	$	114	$	98

Summary of Reconciliation Between the Statutory Tax Rate and Actual Effective Tax Rate

The following table provides a reconciliation between the statutory tax rate and the actual effective tax rate:

TABLE 20.2

Year Ended December 31	2023		2022		2021
Statutory federal tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit	1.9		1.5		1.1
Tax-exempt interest	(1.6)		(1.6)		(1.7)
Cash surrender value on BOLI	(0.5)		(0.4)		(0.5)
Tax credits	(7.3)		(3.2)		(3.2)
Affordable housing cost amortization, net of tax benefits	2.3		2.2		2.2
Other items	1.1		1.1		0.7
Effective tax rate	16.9	%	20.6	%	19.6	%

Summary of Deferred Tax Assets and Liabilities from Tax Effects of Temporary Differences

The following table presents the tax effects of significant temporary differences that give rise to federal and state DTAs and DTLs:

TABLE 20.3

December 31	2023		2022
(in millions)
Deferred tax assets:
Allowance for credit losses	$	91	$	90
Discounts on loans acquired in a business combination	10		14
Net operating loss/tax credit carryforwards	45		50
Deferred compensation	16		16
Securities impairments	2		2
Lease liability	60		39
Net unrealized securities losses	56		90
Other	34		13
Total	314		314
Valuation allowance	(32)		(35)
Total deferred tax assets	282		279
Deferred tax liabilities:
Loan costs	(10)		(10)
Depreciation	(8)		(7)
Prepaid expenses	(1)		(1)
Amortizable intangibles	(20)		(24)
Pension and other defined benefit plans	(10)		(7)
Lease financing	(40)		(31)
Mortgage servicing rights	(13)		(12)
Lease ROU asset	(57)		(35)
Other	(2)		(4)
Total deferred tax liabilities	(161)		(131)
Net deferred tax assets	$	121	$	148