LEASES (Tables)

6 Months Ended

Jun. 30, 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	June 30, 2024			December 31, 2023
Lease assets:
Operating lease ROU assets	Other assets	$	344		$	354
Finance leases	Premises and equipment	8			9
Total lease assets		$	352		$	363
Lease liabilities:
Operating leases	Other liabilities	$	385		$	396
Finance leases	Other borrowings	8			9
Total lease liabilities		$	393		$	405
Weighted-average remaining lease terms:
Operating leases		7.7 years			8.1 years
Finance leases		16.1 years			15.4 years
Weighted-average discount rate:
Operating leases		2.79		%	2.70		%
Finance leases		3.59			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 June 30,				Six Months Ended June 30,
	Classification	2024		2023		2024		2023
Operating lease cost	Occupancy expense	$	19	$	15	$	37	$	28
Finance lease ROU asset amortization	Equipment expense	—		—		1		1
Variable lease cost (1)	Occupancy expense	6		4		15		7
Sublease income	Occupancy expense	(2)		(1)		(3)		(1)
Net lease cost (1)		$	23	$	18	$	50	$	35

(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	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	37	$	28
Financing cash flows from finance leases	1		1
ROU assets obtained in exchange for new operating lease liabilities	22		10

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Lease income – Operating leases	$	241	$	221	$	478	$	435
Variable lease income – Operating leases (1)	18		17		36		36
Rental income on operating leases	259		238		514		471
Interest income – Sales type and direct financing leases	44		43		87		84
Variable lease income included in Other noninterest income (2)	15		14		31		28
Interest income – Leveraged leases	1		4		2		9
Total lease income	$	319	$	299	$	634	$	592

(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.