Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense

The provision (benefit) for income taxes for the year ended December 31, 2023, 2022 and 2021 is comprised of the following:

Provision (Benefit) for Income Taxes


dollars in millions	Year ended December 31
	2023		2022		2021
Current U.S. federal income tax provision	$	400	$	58	$	140
Deferred U.S. federal income tax provision / (benefit)	46		170		(6)
Total federal income tax provision	446		228		134
Current state and local income tax provision	372		4		21
Deferred state and local income tax (benefit) / provision	(222)		23		(1)
Total state and local income tax provision	150		27		20
Total non-U.S. income tax provision	15		9		—
Total provision for income taxes	$	611	$	264	$	154

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation from the U.S. Federal statutory rate to BancShares’ actual effective income tax rate for the year ended December 31, 2023, 2022 and 2021 is presented below. Income tax expense (benefit) includes, if applicable, federal, state and foreign taxes.

Percentage of Pretax Income


dollars in millions	Effective Tax Rate
	2023						2022						2021
	Pretax Income		Income Tax Expense (Benefit)		Percentage of Pretax Income		Pretax Income		Income Tax Expense (Benefit)		Percentage of Pretax Income		Pretax Income		Income Tax Expense (Benefit)		Percentage of Pretax Income
Federal income taxes and rate	$	12,077	$	2,536	21.0	%	$	1,362	$	286	21.0	%	$	701	$	147	21.0	%
Increase (decrease) due to:
State and local income taxes, net of federal income tax benefit			804		6.7	%			53		3.9	%			16		2.2	%
Gain on acquisition			(2,703)		(22.4)	%			(105)		(7.7)	%			—		—	%
Domestic tax credits			(26)		(0.2)	%			(20)		(1.5)	%			(5)		(0.7)	%
Effect of BOLI surrender(1)			—		—	%			48		3.5	%			—		—	%
Deferred tax liability adjustment			11		0.1	%			(8)		(0.6)	%			—		—	%
Difference in tax rates applicable to non-U.S. earnings			1		—	%			1		0.1	%			—		—	%
Repayment of claim of right income			—		—	%			—		—	%			(2)		(0.3)	%
Valuation allowances			(40)		(0.3)	%			(5)		(0.4)	%			—		—	%
Other			28		0.2	%			14		1.1	%			(2)		(0.2)	%
Provision for income taxes and effective tax rate			$	611	5.1	%			$	264	19.4	%			$	154	22.0	%

(1) Includes penalty taxes.

Schedule of Components of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to deferred income tax assets and liabilities at December 31, 2023 and 2022 are presented below:

Components of Deferred Income Tax Assets and Liabilities


dollars in millions	2023		2022
Deferred Tax Assets:
Net operating loss carry forwards	$	118	$	358
Basis difference in loans	—		57
Allowance for loan and lease losses	542		252
Accrued liabilities and reserves	104		37
Deferred compensation	152		51
Lease liabilities	115		92
Domestic tax credits	21		176
Mark to market adjustments	21		28
Capitalized costs	75		15
Net unrealized loss on investment securities available for sale	235		275
Other	42		48
Total gross deferred tax assets	1,425		1,389
Deferred Tax Liabilities:
Operating leases	(1,729)		(1,311)
Basis difference in loans	(2,598)		—
Right of use assets for operating leases	(110)		(86)
Loans and direct financing leases	(260)		(43)
Deferred BOLI gain	—		(15)
Intangibles	(56)		(5)
Nonmarketable equity securities	(14)		(9)
Fixed assets	(17)		(6)
Pension assets	(110)		(54)
Prepaid expenses	(14)		(14)
Market discount accretion	(33)		(35)
Other	(35)		(27)
Total deferred tax liabilities	(4,976)		(1,605)
Total net deferred tax liability before valuation allowances	(3,551)		(216)
Less: valuation allowances	(28)		(70)
Net deferred tax liability after valuation allowances	$	(3,579)	$	(286)

Schedule of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits ("UTBs") is as follows:

Unrecognized Tax Benefits (1)


	December 31, 2023						December 31, 2022
dollars in millions	Liabilities for Unrecognized Tax Benefits		Interest / Penalties		Total		Total
Balance at beginning of period	$	27	$	3	$	30	$	31

Effect of CIT Merger	—		—		—		6
Additions for tax positions related to prior years	4		1		5		1
Reductions for tax positions of prior years	—		—		—		(2)
Expiration of statutes of limitations	(2)		—		(2)		(1)
Settlements	(1)		(1)		(2)		(5)

Balance at end of period	$	28	$	3	$	31	$	30

(1) Tabular rollforward does not present the comparable data for 2021, as activity for that year was not material.

Summary of Income Tax Audits

The table below presents the earliest tax years that remain subject to examination by major jurisdiction.


Jurisdiction			December 31, 2023
U.S. Federal			2020
New York State and City			2015
North Carolina			2019
California			2017
Canada			2016