Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense from continuing operations for the years ended December 31 were as follows:



	2019		2018		2017
	(In millions)
Current income tax expense:
Federal	$	279	$	175	$	373
State	62		29		30
Total current expense	$	341	$	204	$	403
Deferred income tax expense:
Federal	$	29	$	130	$	180
State	33		53		36
Total deferred expense	$	62	$	183	$	216
Total income tax expense	$	403	$	387	$	619

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Note: The table above does not include total income tax expense (benefit) from discontinued operations of zero, $80 million, and $(3) million in 2019, 2018 and 2017, respectively. The deferred income tax expense (benefit) reflected in discontinued operations was zero, $43 million and $(7) million in 2019, 2018 and 2017, respectively.

Reconciliation Of Continuing Operations Effective Income Tax Rate Table

Income taxes from continuing operations for financial reporting purposes differs from the amount computed by applying the statutory federal income tax rate of 21 percent for the years ended December 31, 2019 and 2018, and 35 percent for the year ended December 31, 2017, as shown in the following table:



	2019			2018			2017
	(Dollars in millions)
Tax on income from continuing operations computed at statutory federal income tax rate	$	417		$	410		$	651
Increase (decrease) in taxes resulting from:
State income tax, net of federal tax effect	75			65			43
Tax-exempt interest	(39		)	(37		)	(54		)
Affordable housing investment amortization, net of tax benefits (excluding Tax Reform)	(34		)	(37		)	(52		)
Deferred tax revaluation and other impacts of Tax Reform	—			(37		)	61
Non-deductible expenses	19			28			3
Bank-owned life insurance	(19		)	(16		)	(32		)
Lease financing	5			11			16
Other, net	(21		)	—			(17		)
Income tax expense	$	403		$	387		$	619
Effective tax rate	20.3		%	19.8		%	33.3		%

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Note: Income tax expense includes amortization of affordable housing investments of $131 million, $137 million, and $160 million (including $23 million due to impact of Tax Reform in 2017) for 2019, 2018 and 2017, respectively. The additional income tax expense due to Tax Reform of $61 million in 2017 included $133 million of income tax expense related to the revaluation of unrealized gains and losses included in stockholders' equity.

Summary Of Significant Components Of Deferred Tax Assets And Liabilities

Significant components of the Company’s net deferred tax asset (liability) at December 31 are listed below:



	2019			2018
	(In millions)
Deferred tax assets:
Allowance for loan losses	$	231		$	226
Right of use liability	124			—
State net operating losses, net of federal tax effect	50			73
Unrealized losses included in stockholder's equity	30			325
Accrued expenses	30			48
Federal tax credit carryforwards	12			14
Other	16			21
Total deferred tax assets	493			707
Less: valuation allowance	(32		)	(30		)
Total deferred tax assets less valuation allowance	461			677
Deferred tax liabilities:
Lease financing	354			330
Right of use asset	115			—
Goodwill and intangibles	92			94
Employee benefits and deferred compensation	90			82
Mortgage servicing rights	61			73
Fixed assets	42			41
Other	35			37
Total deferred tax liabilities	789			657
Net deferred tax asset (liability)	$	(328	)	$	20

Summary Of Details Of Tax Carryforwards Table

The following table provides details of the Company’s tax carryforwards at December 31, 2019, including the expiration dates, any related valuation allowance and the amount of pre-tax earnings necessary to fully realize each net deferred tax asset balance:



	Expiration Dates	Deferred Tax Asset Balance		Valuation Allowance		Net Deferred Tax Asset Balance		Pre-Tax Earnings Necessary to Realize ⁽¹⁾
	(In millions)
General business credits	2039	$	12	$	—	$	12	$ N/A
Net operating losses-states	2020-2024	23		11		12		253
Net operating losses-states	2025-2031	20		16		4		65
Net operating losses-states	2032-2039	5		5		—		—
Net operating losses-states	None	2		—		2		N/A

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(1) N/A indicates that net operating losses with no expiration and tax credits are not measured on a pre-tax basis.

Schedule of Unrecognized Tax Benefits Roll Forward

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



	2019			2018			2017
	(In millions)
Balance at beginning of year	$	13		$	27		$	31
Additions based on tax positions taken in a prior period	25			—			—
Additions based on tax positions taken in the current period	—			11			—
Reductions based on tax positions taken in a prior period	—			(13		)	—
Settlements	—			(11		)	—
Expiration of statute of limitations	(1		)	(1		)	(4		)
Balance at end of year	$	37		$	13		$	27