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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments, Offsetting Assets
The following table presents notional amounts and fair values of derivative financial instruments:

Notional Amount and Fair Value of Derivative Financial Instruments
dollars in millionsJune 30, 2025December 31, 2024
Notional AmountAsset Fair ValueLiability Fair ValueNotional AmountAsset Fair ValueLiability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Fair Value Hedges
Interest rate contracts hedging time deposits$134 $— $— $334 $— $— 
Interest rate contracts hedging long-term borrowings
200 — — 750 — — 
Total fair value hedges (1) (2)
334 — — 1,084 — — 
Cash Flow Hedges
Interest rate contracts hedging loans (1) (2)
3,000 — — 3,500 1 — 
Total derivatives designated as hedging instruments$3,334 $— $— $4,584 $1 $— 
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Interest rate contracts (1) (2)
$27,721 $418 $(411)$26,235 $491 $(516)
Foreign exchange contracts (3)
8,408 188 (219)7,843 152 (108)
Other contracts (4)
1,520 20 (1)1,316 16 (1)
Total derivatives not designated as hedging instruments$37,649 $626 $(631)$35,394 $659 $(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets$626 $(631)$660 $(625)
Less: gross amounts offset in the Consolidated Balance Sheets— — — — 
Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets$626 $(631)$660 $(625)
(1)    Fair value balances include accrued interest.
(2)    BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information.
(3)    The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $300 million and $0 million, respectively, as of June 30, 2025, and $177 million and $0 million, respectively, as of December 31, 2024.
(4)     Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants.

The following table presents the impact of variation margin netting (form of collateral payment when the underlying fair value changes) on derivative assets and liabilities:

Variation Margin Payments
dollars in millionsJune 30, 2025December 31, 2024
Asset Fair ValueLiability Fair ValueAsset Fair ValueLiability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Gross fair value$20 $— $15 $— 
Cleared trades, variation margin netting(20)— (14)— 
Total derivatives designated as hedging instruments$— $— $1 $— 
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Gross fair value$688 $(670)$742 $(647)
Cleared trades, variation margin netting(62)39 (83)22 
Total derivatives not designated as hedging instruments$626 $(631)$659 $(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets$626 $(631)$660 $(625)
Amounts subject to master netting agreements (1)
(146)146 (48)48 
Cash collateral pledged (received) subject to master netting agreements (2)
(222)108 (539)2 
Total net derivative fair value$258 $(377)$73 $(575)
(1)    BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure.
(2)    In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively.
Schedule of Derivative Instruments, Offsetting Liabilities
The following table presents notional amounts and fair values of derivative financial instruments:

Notional Amount and Fair Value of Derivative Financial Instruments
dollars in millionsJune 30, 2025December 31, 2024
Notional AmountAsset Fair ValueLiability Fair ValueNotional AmountAsset Fair ValueLiability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Fair Value Hedges
Interest rate contracts hedging time deposits$134 $— $— $334 $— $— 
Interest rate contracts hedging long-term borrowings
200 — — 750 — — 
Total fair value hedges (1) (2)
334 — — 1,084 — — 
Cash Flow Hedges
Interest rate contracts hedging loans (1) (2)
3,000 — — 3,500 1 — 
Total derivatives designated as hedging instruments$3,334 $— $— $4,584 $1 $— 
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Interest rate contracts (1) (2)
$27,721 $418 $(411)$26,235 $491 $(516)
Foreign exchange contracts (3)
8,408 188 (219)7,843 152 (108)
Other contracts (4)
1,520 20 (1)1,316 16 (1)
Total derivatives not designated as hedging instruments$37,649 $626 $(631)$35,394 $659 $(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets$626 $(631)$660 $(625)
Less: gross amounts offset in the Consolidated Balance Sheets— — — — 
Net amount presented in other assets and other liabilities in the Consolidated Balance Sheets$626 $(631)$660 $(625)
(1)    Fair value balances include accrued interest.
(2)    BancShares accounts for swap contracts cleared by the Chicago Mercantile Exchange and LCH Clearnet as “settled-to-market.” As a result, the derivative asset and liability fair values in the table above are presented net of the variation margin payments. Refer to the table below for more information.
(3)    The foreign exchange contracts exclude foreign exchange spot contracts. The notional and net fair value amounts of these contracts were $300 million and $0 million, respectively, as of June 30, 2025, and $177 million and $0 million, respectively, as of December 31, 2024.
(4)     Other derivative contracts not designated as hedging instruments include risk participation agreements and equity warrants.

The following table presents the impact of variation margin netting (form of collateral payment when the underlying fair value changes) on derivative assets and liabilities:

Variation Margin Payments
dollars in millionsJune 30, 2025December 31, 2024
Asset Fair ValueLiability Fair ValueAsset Fair ValueLiability Fair Value
Derivatives designated as hedging instruments (Qualifying hedges)
Gross fair value$20 $— $15 $— 
Cleared trades, variation margin netting(20)— (14)— 
Total derivatives designated as hedging instruments$— $— $1 $— 
Derivatives not designated as hedging instruments (Non-qualifying hedges)
Gross fair value$688 $(670)$742 $(647)
Cleared trades, variation margin netting(62)39 (83)22 
Total derivatives not designated as hedging instruments$626 $(631)$659 $(625)
Gross derivatives fair values presented in the Consolidated Balance Sheets$626 $(631)$660 $(625)
Amounts subject to master netting agreements (1)
(146)146 (48)48 
Cash collateral pledged (received) subject to master netting agreements (2)
(222)108 (539)2 
Total net derivative fair value$258 $(377)$73 $(575)
(1)    BancShares’ derivative transactions are governed by International Swaps and Derivatives Association (“ISDA”) agreements that allow for net settlements of certain payments as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. BancShares believes its ISDA agreements meet the definition of a master netting arrangement or similar agreement for purposes of the above disclosure.
(2)    In conjunction with the ISDA agreements described above, BancShares has entered into collateral arrangements with its counterparties, which provide for the exchange of cash depending on the change in the market valuation of the derivative contracts outstanding. Such collateral is available to be applied in settlement of the net balances upon an event of default of one of the counterparties. Collateral pledged or received is included in other assets or deposits, respectively.
Schedule of Fair Value and Non-Qualifying Hedges
The following table presents the impact of fair value hedges recorded in interest expense on the Consolidated Statements of Income:

Recognized Gains (Losses) on Fair Value Hedges
dollars in millionsThree Months Ended June 30,Six Months Ended June 30,
Interest Expense2025202420252024
Gain (loss) on hedging instruments - time depositsDeposits$— $(1)$— $(1)
Loss on hedging instruments - borrowingsBorrowings— (1)— (6)
Gain (loss) on hedged item - time depositsDeposits— 1 — 1 
Gain on hedged item - borrowingsBorrowings1 — 2 5 
Net gain on fair value hedgesTotal interest expense$1 $(1)$2 $(1)

The following table presents the carrying value of hedged items and associated cumulative hedging adjustment related to fair value hedges:

Carrying Value of Hedged Items
dollars in millionsCumulative Fair Value Hedging Adjustment Included in the Carrying Value of Hedged Items
Carrying Value of Hedged ItemsCurrently DesignatedNo Longer Designated
June 30, 2025
Long-term borrowings$219 $— $— 
Deposits134 — — 
December 31, 2024
Long-term borrowings795 2 — 
Deposits335 1 — 
The following table presents gains on non-qualifying hedges recognized on the Consolidated Statements of Income:

Gains (Losses) on Non-Qualifying Hedges
dollars in millionsThree Months Ended June 30,Six Months Ended June 30,
Amounts Recognized2025202420252024
Interest rate contractsOther noninterest income$7 $3 $6 $11 
Foreign currency forward contracts (1)
Other noninterest income(45)11 (64)23 
Other contractsOther noninterest income2 — 2 (1)
Total non-qualifying hedges - income statement impact$(36)$14 $(56)$33 
(1) This is primarily related to economic hedges of foreign currency risks arising from loans and other assets denominated in foreign currency. There is an offsetting impact within noninterest income for the foreign exchange revaluation of the associated assets denominated in foreign currency.
Schedule of Unrealized Gain on Cash Flow Hedges
The following table presents the pretax unrealized gain on hedging instruments in cash flow hedges, which are reported in other comprehensive income, and the pretax amount reclassified from accumulated other comprehensive income (“AOCI”) to earnings:

Unrealized Gain on Cash Flow Hedges
dollars in millionsThree Months Ended June 30,Six Months Ended June 30,
2025202420252024
Other comprehensive income on cash flow hedge derivatives before reclassifications$— $3 $12 $3 
Amounts reclassified from AOCI to earnings(1)— (4)— 
Other comprehensive income on cash flow hedge derivatives$(1)$3 $8 $3 
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table presents other information for cash flow hedges:

Other Information for Cash Flow Hedges
dollars in millionsJune 30, 2025December 31, 2024
Unrealized gain on cash flow hedge derivatives reported in AOCI, net of income taxes$14 $8 
Estimate to be reclassified from AOCI to earnings during the next 12 months, net of income taxes (1)
$6 $7 
Maximum number of months over which forecasted cash flows are hedged2524
(1) Reclassified amounts could differ from amounts actually recognized due to factors such as changes in interest rates, hedge de-designations and the addition of other hedges.