Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Components of Income Tax Expense (Benefit)

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


	2022		2021		2020
	(In millions)
Current income tax expense:
Federal	$	493	$	456	$	312
State	116		73		66
Total current expense	$	609	$	529	$	378
Deferred income tax expense (benefit):
Federal	$	26	$	132	$	(142)
State	(4)		33		(16)
Total deferred expense (benefit)	$	22	$	165	$	(158)
Total income tax expense	$	631	$	694	$	220

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:


	2022			2021			2020
	(Dollars in millions)
Tax on income computed at statutory federal income tax rate	$	604		$	675		$	276
Increase (decrease) in taxes resulting from:
State income tax, net of federal tax effect	88			83			42
Non-deductible expenses	34			18			22
Tax-exempt interest	(33)			(30)			(34)
Affordable housing credits, net of amortization	(32)			(25)			(31)
Bank-owned life insurance	(16)			(20)			(22)
Impact of change in unrecognized tax benefits	—			—			(23)




Other, net	(14)			(7)			(10)
Income tax expense(1)	$	631		$	694		$	220
Effective tax rate	22.0		%	21.6		%	16.8		%

__________

(1) Income tax expense includes gross amortization of affordable housing investments of $149 million, $139 million, and $133 million for 2022, 2021 and 2020, respectively.

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:


	2022		2021
	(In millions)
Deferred tax assets:
Unrealized losses included in shareholders' equity	$	1,138	$	—
Allowance for credit losses	401		400
Right of use liability	136		132
Accrued expenses	61		32

Other	47		15

Federal and state net operating losses, net of federal tax effect	40		53
Total deferred tax assets	1,823		632
Less: valuation allowance	(21)		(29)
Total deferred tax assets less valuation allowance	1,802		603
Deferred tax liabilities:
Lease financing	403		369
Right of use asset	128		123
Mortgage servicing rights	122		78
Unrealized gains included in shareholders' equity	—		98
Goodwill and intangibles	103		100
Fixed assets	52		67
Employee benefits and deferred compensation	29		31
Other	22		43

Total deferred tax liabilities	859		909
Net deferred tax asset (liability)	$	943	$	(306)

Summary Of Details Of Tax Carryforwards Table

The following table provides details of the Company’s tax carryforwards at December 31, 2022, including the expiration dates and related valuation allowance:


	Expiration Dates	Deferred Tax Asset Balance		Valuation Allowance		Net Deferred Tax Asset Balance
	(In millions)
Net operating losses-federal	2037	$	5	$	—	$	5
Net operating losses-federal	None	11		—		11
Net operating losses-states	2023-2027	16		15		1
Net operating losses-states	2028-2034	3		2		1
Net operating losses-states	2035-2042	3		2		1
Net operating losses-states	None	2		2		—
		$	40	$	21	$	19

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of UTB is as follows:


	2022		2021		2020
	(In millions)
Balance at beginning of year	$	9	$	12	$	37
Additions based on tax positions taken in a prior period	—		—		2

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	$	8	$	9	$	12