Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 13 - INCOME TAXES

For the three months ended June 30, 2019 and 2018, the provision for income taxes was $105 million and $171 million, representing effective tax rates of 13% and 19%, respectively. For the six months ended June 30, 2019 and 2018, the provision for income taxes was $208 million and $318 million, representing effective tax rates of 14% and 19%, respectively. The effective tax rates for the six months ended June 30, 2019 and 2018 were favorably impacted by $49 million and $4 million of net discrete income tax benefits, respectively.

The $49 million net discrete income tax benefit for the six months ended June 30, 2019 was driven by $31 million of tax benefits related to changes in the liability for unrecognized tax benefits due to the completion of certain income tax authority

examinations and the expiration of statutes of limitation, $10 million of tax benefits related primarily to stock-based compensation, and $8 million of tax benefits related primarily to state income tax true-ups.

The provision for income taxes includes both federal and state income taxes and differs from the provision using statutory rates due primarily to favorable permanent tax items such as interest income from lending to tax-exempt entities, tax credits, and amortization expense related to qualified affordable housing investment costs. The Company calculated the provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income and adjusting for discrete items that occurred during the period.