LEASES (Tables)

9 Months Ended

Sep. 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	September 30, 2024			December 31, 2023
Lease assets:
Operating lease ROU assets	Other assets	$	331		$	354
Finance leases	Premises and equipment	7			9
Total lease assets		$	338		$	363
Lease liabilities:
Operating leases	Other liabilities	$	373		$	396
Finance leases	Other borrowings	8			9
Total lease liabilities		$	381		$	405
Weighted-average remaining lease terms:
Operating leases		7.5 years			8.1 years
Finance leases		16.5 years			15.4 years
Weighted-average discount rate:
Operating leases		2.80		%	2.70		%
Finance leases		3.63			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 September 30,				Nine Months Ended September 30,
	Classification	2024		2023		2024		2023
Operating lease cost	Occupancy expense	$	19	$	18	$	56	$	46
Finance lease ROU asset amortization	Equipment expense	—		1		1		1
Variable lease cost (1)	Occupancy expense	7		8		22		16
Sublease income	Occupancy expense	(1)		(1)		(4)		(2)
Net lease cost (1)		$	25	$	26	$	75	$	61

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

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,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	57	$	45
Financing cash flows from finance leases	1		2
ROU assets obtained in exchange for new operating lease liabilities	26		69
ROU assets obtained in exchange for new finance lease liabilities	—		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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Lease income – Operating leases	$	236	$	229	$	714	$	664
Variable lease income – Operating leases (1)	26		19		62		55
Rental income on operating leases	262		248		776		719
Interest income – Sales type and direct financing leases	44		43		131		127
Variable lease income included in Other noninterest income (2)	15		15		46		44
Interest income – Leveraged leases	1		2		3		11
Total lease income	$	322	$	308	$	956	$	901

(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.