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INCOME TAXES
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income Tax Expense
Federal and state income tax expense and the statutory tax rate and the actual effective tax rate consist of the following:
TABLE 14.1
Three Months Ended
March 31,
(dollars in millions)20262025
Current income taxes:
Federal taxes$27 $19 
State taxes3 2 
Total current income taxes30 21 
Deferred income taxes:
Federal taxes6 9 
State taxes1 1 
Total deferred income taxes7 10 
Total income taxes$37 $31 
Statutory federal tax rate21.0 %21.0 %
Effective tax rate21.2 20.9 
Income tax expense was higher for the three months ended March 31, 2026, primarily due to higher pre-tax income.
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax purposes. Deferred tax assets and liabilities are measured based on the enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Net deferred tax liabilities were $17.3 million and $17.1 million at March 31, 2026 and December 31, 2025, respectively.