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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Significant Components of Provision for Income Taxes Attributable to Continuing Operations

The following table presents significant components of the provision for income taxes attributable to continuing operations for the years ended December 31, 2019, 2018 and 2017.

Table 15.1: Significant Components of the Provision for Income Taxes Attributable to Continuing Operations

		Year Ended December 31,
(Dollars in millions)		2019				2018				2017
Current income tax provision:
Federal taxes		$	1,207			$	210			$	1,585
State taxes		301				234				223
International taxes		129				135				133
Total current provision		$	1,637			$	579			$	1,941
Deferred income tax provision (benefit):
Federal taxes		$	(222	)		$	620			$	1,509
State taxes		(45		)		115				(69		)
International taxes		(29		)		(21		)		(6		)
Total deferred provision (benefit)		(296		)		714				1,434
Total income tax provision		$	1,341			$	1,293			$	3,375

Schedule of Effective Income Tax Rate

The following table presents the reconciliation of the U.S. federal statutory income tax rate to the effective income tax rate applicable to income from continuing operations for the years ended December 31, 2019, 2018 and 2017.

Table 15.2: Effective Income Tax Rate

		Year Ended December 31,
		2019			2018			2017
Income tax at U.S. federal statutory tax rate		21.0	%		21.0	%		35.0	%
State taxes, net of federal benefit		3.1			3.2			2.2
Non-deductible expenses		1.6			2.2			0.7
Affordable housing, new markets and other tax credits		(5.2	)		(4.0	)		(5.8	)
Tax-exempt interest and other nontaxable income		(0.8	)		(0.7	)		(1.5	)
IRS method changes		0.0			(3.9	)		0.0
Impacts of the Tax Act		0.0			(0.3	)		32.2
Other, net		(0.2	)		0.2			(1.3	)
Effective income tax rate		19.5	%		17.7	%		61.5	%

Schedule of Significant Components of Deferred Tax Assets and Liabilities

The following table presents significant components of our deferred tax assets and liabilities as of December 31, 2019 and 2018. The valuation allowance below represents the adjustment of certain state deferred tax assets and net operating loss carryforwards to the amount we have determined is more likely than not to be realized.

Table 15.3: Significant Components of Deferred Tax Assets and Liabilities

(Dollars in millions)		December 31, 2019				December 31, 2018
Deferred tax assets:
Allowance for loan and lease losses		$	1,729			$	1,700
Rewards programs		579				500
Lease liabilities		407				0
Compensation and employee benefits		301				167
Net operating loss and tax credit carryforwards		284				271
Partnership investments		202				162
Goodwill and intangibles		161				187
Unearned income		95				114
Net unrealized losses on derivatives		0				135
Security and loan valuations(1)		0				288
Other assets		142				152
Subtotal		3,900				3,676
Valuation allowance		(223		)		(245		)
Total deferred tax assets		3,677				3,431
Deferred tax liabilities:
Original issue discount		600				720
Right-of-use assets		393				0
Security and loan valuations(1)		234				0
Fixed assets and leases		189				204
Partnership investments		147				102
Loan fees and expenses		100				75
Net unrealized gains on derivatives		93				0
Mortgage servicing rights		55				48
Other liabilities		146				137
Total deferred tax liabilities		1,957				1,286
Net deferred tax assets		$	1,720			$	2,145

_________

⁽¹⁾ 

Amount includes the tax impact of our December 31, 2019 transfer of our entire portfolio of held to maturity securities to available for sale.

Schedule of Reconciliation of Change in Unrecognized Tax Benefits

The following table presents the accrued balance of tax, interest and penalties related to unrecognized tax benefits.

Table 15.4: Reconciliation of the Change in Unrecognized Tax Benefits

(Dollars in millions)		Gross Unrecognized Tax Benefits				Accrued Interest and Penalties				Gross Tax, Interest and Penalties
Balance as of January 1, 2017		$	85			$	24			$	109
Additions for tax positions related to prior years		5				7				12
Reductions for tax positions related to prior years due to IRS and other settlements		(4		)		(2		)		(6		)
Balance as of December 31, 2017		86				29				115
Additions for tax positions related to the current year		28				0				28
Additions for tax positions related to prior years		402				25				427
Reductions for tax positions related to prior years due to IRS and other settlements		(76		)		(19		)		(95		)
Balance as of December 31, 2018		440				35				475
Additions for tax positions related to the current year		23				17				40
Additions for tax positions related to prior years		12				4				16
Reductions for tax positions related to prior years due to IRS and other settlements		(44		)		(25		)		(69		)
Balance as of December 31, 2019		$	431			$	31			$	462
Portion of balance at December 31, 2019 that, if recognized, would impact the effective income tax rate		$	164			$	24			$	188

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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