Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Expense (Benefit)

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


	2021		2020		2019
	(In millions)
Current income tax expense:
Federal	$	456	$	312	$	279
State	73		66		62
Total current expense	$	529	$	378	$	341
Deferred income tax expense (benefit):
Federal	$	132	$	(142)	$	29
State	33		(16)		33
Total deferred expense (benefit)	$	165	$	(158)	$	62
Total income tax expense	$	694	$	220	$	403

Reconciliation Of Continuing Operations Effective Income Tax Rate Table

Income taxes for financial reporting purposes differs from the amount computed by applying the statutory federal income tax rate of 21 percent as shown in the following table:


	2021			2020			2019
	(Dollars in millions)
Tax on income computed at statutory federal income tax rate	$	675		$	276		$	417
Increase (decrease) in taxes resulting from:
State income tax, net of federal tax effect	83			42			71
Tax-exempt interest	(30)			(34)			(39)
Affordable housing credits, net of amortization	(25)			(31)			(34)
Bank-owned life insurance	(20)			(22)			(19)
Non-deductible expenses	18			22			19
Impact of change in unrecognized tax benefits	—			(23)			24




Other, net	(7)			(10)			(36)
Income tax expense(1)	$	694		$	220		$	403
Effective tax rate	21.6		%	16.8		%	20.3		%

__________

(1) Income tax expense includes gross amortization of affordable housing investments of $139 million, $133 million, and $131 million for 2021, 2020 and 2019, respectively.

Summary Of Significant Components Of Deferred Tax Assets And Liabilities

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


	2021		2020
	(In millions)
Deferred tax assets:
Allowance for credit losses(1)	$	400	$	573
Right of use liability	132		137
Federal and State net operating losses, net of federal tax effect	53		58

Accrued expenses	32		35

Other	15		13
Total deferred tax assets	632		816
Less: valuation allowance	(29)		(31)
Total deferred tax assets less valuation allowance	603		785
Deferred tax liabilities:
Lease financing	369		413
Right of use asset	123		128
Goodwill and intangibles	100		106
Unrealized gains included in shareholders' equity	98		444
Mortgage servicing rights	78		45
Fixed assets	67		54
Employee benefits and deferred compensation	31		54
Other	43		46

Total deferred tax liabilities	909		1,290
Net deferred tax liability	$	(306)	$	(505)

_______

(1)Regions adopted CECL on January 1, 2020 and the impact resulted in an increase of $126 million in deferred tax assets. Prior to adoption, the deferred tax assets impact is for the allowance for loan losses.

Summary Of Details Of Tax Carryforwards Table

The following table provides details of the Company’s tax carryforwards at December 31, 2021, including the expiration dates and related valuation allowance:


	Expiration Dates	Deferred Tax Asset Balance (1)		Valuation Allowance		Net Deferred Tax Asset Balance
	(In millions)
Net operating losses-federal	2037	$	10	$	—	$	10
Net operating losses-federal	None	11		—		11
Net operating losses-states	2022-2026	19		19		—
Net operating losses-states	2027-2033	8		7		1
Net operating losses-states	2034-2041	4		2		2
Net operating losses-states	None	1		1		—
		$	53	$	29	$	24

________

(1) Federal and state deferred tax assets of $21 million and $1 million, respectively, related to net operating losses were acquired as part of the Company’s April 2020 equipment finance acquisition and the December 2021 commercial real estate lender acquisition. While the federal and certain state net operating losses may be subject to certain annual utilization limits, the Company has determined that a valuation allowance is not necessary based on projected annual limitation and the length of the net operating loss carryover period.

Schedule of Unrecognized Tax Benefits Roll Forward

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


	2021		2020		2019
	(In millions)
Balance at beginning of year	$	12	$	37	$	13
Additions based on tax positions taken in a prior period	—		2		25

Reductions based on tax positions taken in a prior period	—		(25)		—
Settlements	(2)		(1)		—
Expiration of statute of limitations	(1)		(1)		(1)
Balance at end of year	$	9	$	12	$	37