SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2025

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 17 — SEGMENT INFORMATION

Effective January 1, 2025, we made changes to the composition of our reportable segments as further discussed in Note 1—Significant Accounting Policies and Basis of Presentation, and the segment disclosures below for 2024 were recast to conform with those segment composition changes.

BancShares’ segments include the General Bank, the Commercial Bank, SVB Commercial, and Rail. All other financial information not included in the segments is reported in the Corporate section of the segment disclosures. We do not aggregate multiple operating segments into a reportable segment. Therefore, each of our operating segments are reportable segments.

Certain noninterest expenses are directly incurred by a segment, while others are not. Noninterest expenses not directly incurred by a segment are included in Corporate unless allocated to a segment (“Allocated Expenses”). Under our segment expense allocation methodology, Allocated Expenses increase noninterest expense of the applicable segment(s), with an offsetting decrease to Corporate noninterest expense. “All other noninterest expense” in the segment reporting tables below includes the effect of Allocated Expenses, resulting in a reduction to expense (or “Contra Expense”) for Corporate.

General Bank

The General Bank segment delivers products and services to consumers and businesses through our extensive network of branches and various digital channels. We offer a full suite of deposit products, loans (primarily residential mortgages and business and commercial loans), cash management, private banking and wealth management, payment services, and treasury services. We offer conforming and jumbo residential mortgage loans throughout the United States that are primarily originated through branches and retail referrals, employee referrals, internet leads, direct marketing and a correspondent lending channel, as well as through our private banking service. Private banking and wealth management offers a customized suite of products and services to individuals and institutional clients, as well as private equity and venture capital professionals and executive leaders of the innovation companies they support, and premium wine clients. The General Bank segment offers brokerage, investment advisory, private stock loans, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, family office, financial planning, tax planning and trust services. The General Bank segment also includes a community association bank channel that supports deposit, cash management and lending to homeowner associations and property management companies.

Revenue is primarily generated from interest earned on loans. Noninterest income is primarily generated from fees for banking and advisory services, including lending-related fees, most of BancShares’ income related to deposit fees and service charges, cardholder services, along with essentially all of the wealth management services income. We primarily originate loans by utilizing our branch network and industry referrals, as well as direct digital marketing efforts. We derive our SBA loans through a network of SBA originators. We periodically purchase loans on a whole-loan basis. We also invest in community development that supports the construction of affordable housing in our communities in line with our CRA initiatives.

Commercial Bank

The Commercial Bank segment provides a range of lending, leasing, capital markets, asset management, and other financial and advisory services, primarily to small and middle market companies in a wide range of industries, including energy, healthcare, technology media and telecommunications, asset-backed lending, capital finance, maritime, aerospace and defense, and sponsor finance. Loans offered are primarily senior secured loans collateralized by accounts receivable, inventory, machinery and equipment, transportation equipment, and/or intangibles, and are often used for working capital, plant expansion, acquisitions, or recapitalizations. These loans include revolving lines of credit and term loans and, depending on the nature of the collateral, may be referred to as collateral-backed loans, asset-based loans or cash flow loans. We provide senior secured loans to developers and other commercial real estate (“CRE”) professionals. Additionally, we provide small business loans and leases, including both capital and operating leases, through a highly automated credit approval, documentation and funding process.

We provide factoring, receivable management and secured financing to businesses that operate in several industries. These include apparel, textile, furniture, home furnishings, and consumer electronics. Factoring entails the assumption of credit risk with respect to trade accounts receivable arising from the sale of goods from our factoring clients to their customers that have been factored (i.e., sold or assigned to the factor). Our factoring clients, which are generally manufacturers or importers of goods, are the counterparties on factoring, financing or receivables purchasing agreements to sell trade receivables to us. Our factoring clients’ customers, which are generally retailers, are the account debtors and obligors on trade accounts receivable that have been factored.

Revenue is primarily generated from interest and fees on loans. Noninterest income is mostly generated from rental income on operating lease equipment, lending-related fees, including most of BancShares’ capital market fees, and other revenue from banking services. Rental income is generally influenced by the size of the operating lease portfolio. Noninterest income also includes all of the commissions earned on factoring-related activities. We derive most of our commercial lending business through direct marketing to borrowers, lessees, manufacturers, vendors, and distributors. We also utilize referrals as a source for commercial lending business. We may periodically buy participations or syndications of loans and lines of credit and purchase loans on a whole-loan basis.

Rental income and depreciation expense on operating lease equipment is related to small and large ticket equipment we own and lease to others. Operating lease equipment is subject to depreciation expense over the useful life of the small and large ticket equipment, which is generally 3-10 years.

SVB Commercial

The SVB Commercial segment offers products and services to commercial clients and investors across stages, sectors and regions in the innovation ecosystem, as well as private equity and venture capital firms. The SVB Commercial segment provides solutions to the financial needs of commercial clients. Loan products consist of capital call lines of credit, investor dependent loans, and commercial and industrial loans made primarily to technology, life science and healthcare companies.

Revenue is primarily generated from interest earned on loans. Noninterest income is mostly generated from fees, including essentially all of client investment fees and most of the international fees, and other revenue from lending-related activities and banking services.

Deposit products include business and analysis checking accounts, money market accounts, multi-currency accounts, bank accounts, sweep accounts, and positive pay services. Services are provided through online and mobile banking platforms as well as branch locations.

Rail

The Rail segment 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-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. Revenue is generated primarily from rental income on operating lease equipment, which is included in noninterest income, and to a lesser extent, gains on sale of leasing equipment. Rental income is generally influenced by the size of the operating lease portfolio, utilization of the railcars, re-pricing of equipment renewed upon lease maturities, and pricing on new leases. Re-pricing refers to the rental rate in the renewed equipment contract compared to the prior contract.

Operating lease equipment is subject to depreciation expense over the useful life of the rail equipment, which is generally longer in duration, 40-50 years. The Rail segment leases railcars, primarily pursuant to full-service lease contracts under which we, as lessor, are responsible for railcar maintenance and repair. Maintenance and other operating lease expenses relate to equipment ownership and leasing costs associated with the railcar portfolio and tend to be variable due to timing and the number of railcars coming on or off lease as well as asset condition.

Corporate

All other financial information not included in the segments is reported in Corporate. Corporate contains BancShares’ centralized treasury function, which manages the investment security portfolio, interest-earning deposits at banks and corporate/wholesale funding (e.g., borrowings, Direct Bank deposits and brokered deposits). Corporate deposits are primarily comprised of Direct Bank deposits.

Corporate includes interest income on investment securities and interest-earning deposits at banks; interest expense for borrowings, Direct Bank deposits, and brokered deposits; as well as funds transfer pricing allocations. Noninterest income includes gains or losses on sales of investment securities, fair value adjustments on marketable equity securities, and income from bank owned life insurance. Personnel cost in Corporate includes the personnel costs not allocated to the operating segments. Corporate includes acquisition-related expenses and certain items related to accounting for business combinations, such as gains on acquisitions, Day 2 Provision for Credit Losses and discount accretion income for certain acquired loans. Corporate also includes the offsetting impacts of Allocated Expenses as discussed above.

Segment Results and Select Period End Balances

The following tables present the condensed income statements by segment and include the significant segment expenses and measure of segment profit or loss.

dollars in millions	Three Months Ended June 30, 2025
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	824	$	299	$	490	$	(53)	$	135	$	1,695
Rental income on operating lease equipment	—		54		—		218		—		272
All other noninterest income	164		98		130		3		11		406
Total noninterest income	164		152		130		221		11		678
Total revenue	988		451		620		168		146		2,373
Depreciation on operating lease equipment	—		44		—		56		—		100
Maintenance and other operating lease expenses	—		—		—		55		—		55
Personnel cost	210		69		110		6		415		810
Acquisition-related expenses	—		—		—		—		38		38
All other noninterest expense (3)	370		154		272		26		(325)		497
Total noninterest expense	580		267		382		143		128		1,500
Provision for credit losses	13		47		55		—		—		115
Income before income taxes	395		137		183		25		18		758
Income tax expense (benefit)	101		35		47		6		(6)		183
Net income	$	294	$	102	$	136	$	19	$	24	$	575
Select Period End Balances
Loans and leases	$	64,987	$	38,691	$	37,529	$	62	$	—	$	141,269
Operating lease equipment, net	—		750		—		8,716		—		9,466
Deposits	73,499		2,899		37,798		3		45,736		159,935
	Three Months Ended June 30, 2024
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	730	$	311	$	553	$	(45)	$	272	$	1,821
Rental income on operating lease equipment	—		58		—		201		—		259
All other noninterest income	152		77		134		2		15		380
Total noninterest income	152		135		134		203		15		639
Total revenue	882		446		687		158		287		2,460
Depreciation on operating lease equipment	—		48		—		50		—		98
Maintenance and other operating lease expenses	—		—		—		60		—		60
Personnel cost	185		63		123		6		368		745
Acquisition-related expenses	—		—		—		—		44		44
All other noninterest expense (3)	316		135		246		15		(273)		439
Total noninterest expense	501		246		369		131		139		1,386
Provision for credit losses	37		39		19		—		—		95
Income before income taxes	344		161		299		27		148		979
Income tax expense	92		44		85		8		43		272
Net income	$	252	$	117	$	214	$	19	$	105	$	707
Select Period End Balances
Loans and leases	$	63,327	$	36,835	$	39,117	$	62	$	—	$	139,341
Operating lease equipment, net	—		767		—		8,178		—		8,945
Deposits	71,261		3,294		35,773		10		40,741		151,079
(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under Accounting Standards Codification (“ASC”) 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.

dollars in millions	Six Months Ended June 30, 2025
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	1,612	$	592	$	983	$	(105)	$	276	$	3,358
Rental income on operating lease equipment	—		110		—		432		—		542
All other noninterest income	328		167		262		5		9		771
Total noninterest income	328		277		262		437		9		1,313
Total revenue	1,940		869		1,245		332		285		4,671
Depreciation on operating lease equipment	—		88		—		110		—		198
Maintenance and other operating lease expenses	—		—		—		113		—		113
Personnel cost	424		141		224		14		825		1,628
Acquisition-related expenses	—		—		—		—		80		80
All other noninterest expense (3)	721		313		537		40		(637)		974
Total noninterest expense	1,145		542		761		277		268		2,993
Provision for credit losses	59		132		78		—		—		269
Income before income taxes	736		195		406		55		17		1,409
Income tax expense (benefit)	189		50		104		14		(6)		351
Net income	$	547	$	145	$	302	$	41	$	23	$	1,058
	Six Months Ended June 30, 2024
	General Bank		Commercial Bank		SVB Commercial		Rail		Corporate (1)		BancShares (2)
Net interest income (expense)	$	1,414	$	611	$	1,076	$	(88)	$	625	$	3,638
Rental income on operating lease equipment	—		115		—		399		—		514
All other noninterest income	297		160		268		6		21		752
Total noninterest income	297		275		268		405		21		1,266
Total revenue	1,711		886		1,344		317		646		4,904
Depreciation on operating lease equipment	—		94		—		100		—		194
Maintenance and other operating lease expenses	—		—		—		105		—		105
Personnel cost	392		137		242		14		704		1,489
Acquisition-related expenses	—		—		—		—		102		102
All other noninterest expense (3)	637		275		493		29		(562)		872
Total noninterest expense	1,029		506		735		248		244		2,762
Provision for credit losses	58		59		42		—		—		159
Income before income taxes	624		321		567		69		402		1,983
Income tax expense	171		86		160		19		109		545
Net income	$	453	$	235	$	407	$	50	$	293	$	1,438
(1) Corporate includes all other financial information that is not included in the reportable segments.
(2) In the segment reporting table above, there are no reconciling differences between BancShares and the aggregate of all reportable segments and Corporate.
(3) All other noninterest expense represents “other segment items” under ASC 280 and primarily includes Allocated Expenses, net occupancy expense, equipment expense, professional fees, third-party processing fees, FDIC insurance expense, marketing expense, and intangible amortization. All other noninterest expense is presented net of Allocated Expenses in the segment reporting table above, resulting in Contra Expense for Corporate as further discussed above.