Leases (Tables)

9 Months Ended

Sep. 30, 2023

Schedule of Operating and Finance Lease Assets and Liabilities

The following table presents supplemental balance sheet information and remaining weighted average lease terms and discount rates.

Supplemental Lease Information


dollars in millions	Classification	September 30, 2023			December 31, 2022
Lease assets:
Operating lease ROU assets	Other assets	$	403		$	345
Finance leases	Premises and equipment	9			7
Total lease assets		$	412		$	352
Lease liabilities:
Operating leases	Other liabilities	$	411		$	352
Finance leases	Other borrowings	9			7
Total lease liabilities		$	420		$	359
Weighted-average remaining lease terms:
Operating leases		8.4 years			9.6 years
Finance leases		15.1 years			4.1 years
Weighted-average discount rate:
Operating leases		2.70		%	2.19		%
Finance leases		3.48			2.34

Schedule of Net Lease Cost

The following table presents components of lease cost:

Components of Net Lease Cost


dollars in millions		Three Months Ended September 30,				Nine Months Ended September 30,
	Classification	2023		2022		2023		2022
Lease cost
Operating lease cost (1)	Occupancy Expense	$	18	$	14	$	46	$	44
Finance lease cost
Amortization of leased assets	Equipment expense	1		1		1		2

Variable lease cost	Occupancy Expense	8		3		16		9
Sublease income	Occupancy Expense	(1)		(1)		(2)		(2)
Net lease cost		$	26	$	17	$	61	$	53

(1) Includes short-term lease cost, which is not significant.

Schedule of Supplemental Cash Flow Information

The following table presents supplemental cash flow information related to leases:

Supplemental Cash Flow Information


dollars in millions	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	45	$	40

Financing cash flows from finance leases	2		2
ROU assets obtained in exchange for new operating lease liabilities	69		17
ROU assets obtained in exchange for new finance lease liabilities	4		5

Schedule of Operating Lease Income

The table that follows presents lease income related to BancShares’ operating and finance leases:

Lease Income


dollars in millions	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Lease income – Operating leases	$	229	$	201	$	664	$	592
Variable lease income – Operating leases (1)	19		18		55		48
Rental income on operating leases	248		219		719		640
Interest income - Sales type and direct financing leases	43		43		127		127
Variable lease income included in Other noninterest income (2)	15		13		44		37
Interest income - Leveraged leases	2		5		11		14
Total lease income	$	308	$	280	$	901	$	818

(1) Primarily includes per diem railcar operating lease rental income earned on a time or mileage usage basis.

(2) Includes leased equipment property tax reimbursements due from customers of $5 million and $12 million for the three and nine months ended September 30, 2023, respectively, and revenue related to insurance coverage on leased equipment of $11 million and $31 million for the three and nine months ended September 30, 2023, respectively. Includes leased equipment property tax reimbursements due from customers of $4 million and $13 million for the three and nine months ended September 30, 2022, respectively, and revenue related to insurance coverage on leased equipment of $9 million and $24 million for the three and nine months ended September 30, 2022, respectively.