Business Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

As of December 31, 2021, BancShares managed its business and reported its financial results as a single segment. BancShares began reporting multiple segments during the first quarter of 2022. BancShares now has three operating segments: General Banking, Commercial Banking, and Rail, and a non-operating segment, Corporate. BancShares conformed the comparative prior periods presented to reflect the new segments. The substantial majority of BancShares’ operations for historical periods prior to completion of the CIT Merger are included in the General Banking segment. The Commercial Banking and Rail segments primarily relate to operations acquired in the CIT Merger. BancShares' reportable segments are primarily based upon industry categories, target markets, distribution channels and customers served, and, to a lesser extent, the core competencies relating to product origination, operations and servicing and the nature of their regulatory environment. Segment reporting is reflective of BancShares' internal reporting structure and is consistent with the presentation of financial information to the chief operating decision maker. Each of the segments are described below.

General Banking

General Banking delivers services to individuals and businesses through an extensive branch network, digital banking, telephone banking and various ATM networks, including a full suite of deposit products, loans (primarily residential mortgages and commercial loans), and various fee-based services. General Banking also provides: a variety of wealth management products and services to individuals and institutional clients, including brokerage, investment advisory, and trust services; and deposit, cash management and lending to homeowner associations (“HOA”) and property management companies. As part of the CIT Merger, Community Association Banking (“CAB”) products were added that will drive the associated HOA deposit channel. Revenue is primarily generated from interest earned on residential mortgages, small business loans and fees for banking services.

Commercial Banking

Commercial Banking provides lending, leasing and other financial and advisory services, primarily to small and middle-market companies across select industries. Commercial Banking also provides asset-based lending, factoring, receivables management products and supply chain financing. Revenue is primarily generated from interest earned on loans, rents on equipment leased, fees and other revenue from lending and leasing activities and banking services, along with capital markets transactions and commissions earned on factoring and related activities.

Rail

Rail offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers throughout North America. Railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open hopper cars for coal and aggregates; boxcars for paper and auto parts, and center beams and flat cars for lumber. Revenue is primarily from operating lease income.

Corporate

Certain items that are not allocated to operating segments are included in the Corporate segment. Some of the more significant and recurring items include interest income on investment securities, a portion of interest expense primarily related to corporate funding costs (including brokered deposits), income on BOLI (other noninterest income), merger-related costs, as well as certain unallocated costs and intangible asset amortization expense (operating expenses). Corporate also includes certain significant items that are infrequent, such as: the Initial Non-PCD Provision for loans and leases and unfunded commitments; and the preliminary gain on acquisition, each of which are related to the CIT Merger.

Segment Net Income (Loss) and Select Period End Balances

The following table presents the condensed income statement by segment.

dollars in millions	Three Months Ended September 30, 2022
	General Banking		Commercial Banking		Rail		Corporate		Total BancShares
Net interest income (expense)	$	495	$	230	$	(20)	$	90	$	795
Provision for credit losses	2		58		—		—		60
Net interest income (expense) after provision for credit losses	493		172		(20)		90		735
Noninterest income	118		133		170		12		433
Noninterest expense	410		186		110		54		760
Income before income taxes	201		119		40		48		408
Income tax expense	55		25		10		3		93
Net income	$	146	$	94	$	30	$	45	$	315
Select Period End Balances
Loans and leases	$	41,693	$	28,023	$	74	$	—	$	69,790
Deposits	82,730		3,682		14		1,127		87,553
Operating lease equipment, net	—		736		7,248		—		7,984
	Three Months Ended September 30, 2021
	General Banking		Commercial Banking		Rail		Corporate		Total BancShares
Net interest income (expense)	$	363	$	5	$	—	$	(21)	$	347
Benefit for credit losses	(1)		—		—		—		(1)
Net interest income (expense) after benefit for credit losses	364		5		—		(21)		348
Noninterest income	110		—		—		14		124
Noninterest expense	295		1		—		18		314
Income (loss) before income taxes	179		4		—		(25)		158
Income tax expense (benefit)	38		1		—		(5)		34
Net income (loss)	$	141	$	3	$	—	$	(20)	$	124
Select Period End Balances
Loans and leases	$	31,849	$	667	$	—	$	—	$	32,516
Deposits	49,992		73		—		—		50,065
Operating lease equipment, net	—		—		—		—		—

dollars in millions	Nine Months Ended September 30, 2022
	General Banking		Commercial Banking		Rail		Corporate		Total BancShares
Net interest income (expense)	$	1,400	$	641	$	(58)	$	161	$	2,144
(Benefit) provision for credit losses	(7)		60		—		513		566
Net interest income (expense) after provision for credit losses	1,407		581		(58)		(352)		1,578
Noninterest income	365		376		493		473		1,707
Noninterest expense	1,210		557		320		228		2,315
Income (loss) before income taxes	562		400		115		(107)		970
Income tax expense (benefit)	134		90		28		(123)		129
Net income	$	428	$	310	$	87	$	16	$	841
	Nine Months Ended September 30, 2021
	General Banking		Commercial Banking		Rail		Corporate		Total BancShares
Net interest income (expense)	$	1,071	$	12	$	—	$	(50)	$	1,033
Benefit for credit losses	(32)		—		—		—		(32)
Net interest income (expense) after benefit for credit losses	1,103		12		—		(50)		1,065
Noninterest income	325		—		—		69		394
Noninterest expense	875		3		—		33		911
Income (loss) before income taxes	553		9		—		(14)		548
Income tax expense (benefit)	125		2		—		(3)		124
Net income (loss)	$	428	$	7	$	—	$	(11)	$	424