Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense from continuing operations are as follows:

Table 103: Components of Income Tax Expense                         

Year ended December 31 In millions	2020		2019		2018
Current
Federal	$	669	$	570	$	739
State	158		152		178
Total current	$	827	$	722	$	917
Deferred
Federal	(373)		187		13
State	(28)		(8)		(2)
Total deferred	$	(401)	$	179	$	11
Total	$	426	$	901	$	928

Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows:

Table 104: Deferred Tax Assets and Liabilities                         

December 31 – in millions	2020		2019
Deferred tax assets
Allowance for loan and lease losses	$	1,288	$	661
Allowance for unfunded commitments	141		78
Compensation and benefits	227		270
Partnership investments	121		120
Loss and credit carryforward	162		203
Accrued expenses	107		117
Lease obligations	528		545
Other	163		161
Total gross deferred tax assets	2,737		2,155
Valuation allowance	(26)		(31)
Total deferred tax assets	2,711		2,124
Deferred tax liabilities
Leasing	1,179		1,183
Right of Use Assets	476		520
Goodwill and intangibles	193		194
Fixed assets	592		412
Net unrealized gains on securities and financial instruments	929		370
Other	143		306
Total deferred tax liabilities	3,512		2,985
Net deferred tax liability	$	801	$	861

Reconciliation of Statutory and Effective Tax Rates

A reconciliation between the statutory and effective tax rates from continuing operations follows:

Table 105: Reconciliation of Statutory and Effective Tax Rates

Year ended December 31	2020		2019		2018
Statutory tax rate	21.0	%	21.0	%	21.0	%
Increases (decreases) resulting from:
State taxes net of federal benefit	2.0		2.3		2.5
Tax-exempt interest	(1.7)		(1.5)		(1.7)
Life insurance	(1.6)		(1.0)		(1.0)
Tax credits	(6.0)		(4.2)		(4.0)
Federal deferred tax revaluation					(2.1)
Unrecognized tax benefits	(1.6)		(0.1)		1.3
Subsidiary Liquidation	(1.2)
Other	1.5		(0.1)		0.9
Effective tax rate	12.4	%	16.4	%	16.9	%

Net Operating Loss Carryforwards

The net operating loss carryforwards at December 31, 2020 and 2019 follow

Table 106: Net Operating Loss Carryforwards

Dollars in millions	December 31, 2020		December 31, 2019		Expiration
Net Operating Loss Carryforwards:
Federal	$	282	$	402	2032
State	$	848	$	1,197	2021-2039

Change in Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

Table 107: Change in Unrecognized Tax Benefits

In millions	2020		2019		2018
Balance of gross unrecognized tax benefits at January 1	$	130	$	207	$	18
Increases:
Positions taken during a current period	265
Positions taken during a prior period					212
Decreases:
Positions taken during a prior period			(77)		(16)
Settlements with taxing authorities	(130)				(7)
Balance of gross unrecognized tax benefits at December 31	$	265	$	130	$	207
Favorable impact if recognized	$	209	$	76	$	76

IRS Tax Examination Status

Table 108: IRS Tax Examination Status

	Years under examination	Status at December 31
Federal	2016 – 2018	Under Exam