LEASES (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

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	March 31, 2024			December 31, 2023
Lease assets:
Operating lease ROU assets	Other assets	$	355		$	354
Finance leases	Premises and equipment	8			9
Total lease assets		$	363		$	363
Lease liabilities:
Operating leases	Other liabilities	$	397		$	396
Finance leases	Other borrowings	8			9
Total lease liabilities		$	405		$	405
Weighted-average remaining lease terms:
Operating leases		7.9 years			8.1 years
Finance leases		15.7 years			15.4 years
Weighted-average discount rate:
Operating leases		2.76		%	2.70		%
Finance leases		3.55			3.52

Schedule of Net Lease Cost

The following table presents components of lease cost:

Components of Net Lease Cost

dollars in millions		Three Months Ended March 31,
	Classification	2024		2023
Operating lease cost	Occupancy expense	$	18	$	13
Finance lease ROU asset amortization	Equipment expense	1		—
Variable lease cost (1)	Occupancy expense	9		4
Sublease income	Occupancy expense	(1)		(1)
Net lease cost (1)		$	27	$	16

(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	Three Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18	$	13
ROU assets obtained in exchange for new operating lease liabilities	17		4

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 March 31,
	2024		2023
Lease income – Operating leases	$	237	$	214
Variable lease income – Operating leases (1)	18		19
Rental income on operating leases	255		233
Interest income – Sales type and direct financing leases	43		41
Variable lease income included in Other noninterest income (2)	16		15
Interest income – Leveraged leases	1		5
Total lease income	$	315	$	294

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

(2) Includes revenue related to insurance coverage on leased equipment and leased equipment property tax reimbursements due from customers.