v3.26.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income Taxes Included in Income Statement
Income taxes included in the income statement are summarized below. We file a consolidated federal income tax return.
Year ended December 31,
Dollars in millions
202520242023
Currently payable:
Federal$391 $211 $257 
State82 (3)48 
Total currently payable$473 $208 $305 
Deferred:
Federal$(10)$(307)$(84)
State13 (44)(25)
Total deferred3 (351)(109)
Total income tax (benefit) expense (a)
$476 $(143)$196 
(a)There was income tax (benefit) expense on securities transactions of $(1) million in 2025, $(445) million in 2024, and $(3) million in 2023. Income tax expense excludes equity- and gross receipts-based taxes, which are assessed in lieu of an income tax in certain states in which we operate. These non-income taxes, which are recorded in “noninterest expense” on the income statement, totaled $43 million in 2025, $32 million in 2024, and $34 million in 2023.
Schedule of Significant Components of Deferred Tax Assets and Liabilities Included in Accrued Income and Other Assets
Significant components of our deferred tax assets and liabilities included in “accrued income and other assets” on our Consolidated Balance Sheets, are as follows:
December 31,
Dollars in millions
20252024
Allowance for loan and lease losses$422 $411 
Employee benefits212 209 
Net unrealized securities losses566 1,045 
Federal tax credits226 303 
Non-tax accruals79 109 
Operating lease liabilities121 127 
State net operating losses and credits5 20 
Partnership investments91 79 
Other137 149 
Gross deferred tax assets1,859 2,452 
Less: Valuation Allowance5 15 
Total deferred tax assets$1,854 $2,437 
Leasing transactions$306 $378 
State taxes25 76 
Operating lease right-of-use assets112 114 
Goodwill195 178 
Other67 68 
Total deferred tax liabilities705 814 
Net deferred tax assets (liabilities) (a)
$1,149 $1,623 
(a)From continuing operations.
Schedule of Total Income Tax Expense (Benefit) and Resulting Effective Tax Rate
The following table shows how our total income tax expense (benefit) and the resulting effective tax rate were derived:
Year ended December 31,
Dollars in millions
202520242023
AmountRateAmountRateAmountRate
Income (loss) before income taxes times 21% statutory federal tax rate$484 21.0 %$(64)21.0 %$244 21.0 %
State and local income taxes, net of federal income tax effect(a)
75 3.3 (33)10.8 13 1.1 
Tax credits
Low-income housing/New markets(252)(10.9)(211)69.1 (196)(16.9)
Change in valuation allowances(2)(.1)3 (1.0)— — 
Nontaxable or nondeductible items
Tax-exempt interest income(27)(1.2)(27)8.8 (35)(3.0)
Corporate-owned life insurance income(29)(1.3)(29)9.5 (28)(2.4)
Share-based compensation expense(2)(.1)5 (1.6)1 .1 
Federal deposit insurance20 .9 25 (8.2)22 1.9 
Amortization of tax-advantaged investments212 9.2 185 (60.5)171 14.7 
Other permanent differences(3)(.1)7 (2.4)(1)(.1)
Changes in reserves of tax positions— — (4)1.3 5 .4 
Total income tax expense (benefit)$476 20.7 %$(143)46.6 %$196 16.9 %
(a)In 2025, New York, New York City, California, and Illinois comprised the majority of the state and local income taxes, net of federal income tax effect. In 2024, New York, New York City, California, Illinois, and Oregon comprised the majority of this category. In 2023, New York, New York City, California, and Illinois comprised the majority of this category.
Schedule of Income Taxes Paid, Net of Refunds
The following table shows income taxes paid, net of refunds. Amounts presented for individual jurisdictions represented 5% or more of total income taxes paid, net of refunds, for each respective year.
Year ended December 31,
Dollars in millions
202520242023
U.S. Federal$51 $30 $119 
U.S. state and local
California5 — 11 
Illinois— 4 — 
New Jersey— 6 — 
New York City7 — 9 
New York State— — (16)
Other8 28 33 
Total$71 $68 $156 
Schedule of Change in Liability for Unrecognized Tax Benefits
The change in our liability for unrecognized tax benefits is as follows:
Year ended December 31,
Dollars in millions
202520242023
Balance at beginning of year$39 $45 $40 
Increase for other tax positions of prior years— — 5 
Decrease for payments and settlements— (3)— 
Decrease related to tax positions taken in prior years(36)(3)— 
Balance at end of year$3 $39 $45