Bank Premises and Equipment

12 Months Ended

Dec. 31, 2014

Bank Premises and Equipment

Bank Premises and Equipment

7. BANK PREMISES AND EQUIPMENT

The following is a summary of bank premises and equipment at December 31:
($ in millions)	Estimated Useful Life		2014	2013
Land and improvements		$	816	838
Buildings	2 to 30 yrs.		1,810	1,763
Equipment	1 to 30 yrs.		1,682	1,581
Leasehold improvements	5 to 30 yrs.		416	397
Construction in progress			98	118
Accumulated depreciation and amortization			(2,357)	(2,166)
Total		$	2,465	2,531

Depreciation and amortization expense related to bank premises and equipment was $254 million in 2014, $245 million in 2013 and $233 million in 2012.

At December 31, 2014 and 2013, land and improvements included $165 million and $196 million, respectively, associated with parcels of undeveloped land intended for future branch expansion. The Bancorp monitors changing customer preferences associated with the channels it uses for banking transactions to evaluate the efficiency, competitiveness and quality of the customer service experience of its retail transaction network. As part of this ongoing assessment the Bancorp may determine that it is no longer fully committed to maintaining full-service branches at certain of its existing banking center locations. Similarly, the Bancorp may also determine that it is no longer fully committed to building banking centers on certain parcels of land which had previously been held for future branch expansion. In these circumstances, the Bancorp performs an assessment of the recoverability of these long-lived assets. Impairment losses associated with such assessments and lower of cost or market adjustments were $20 million, $6 millionand $21 million for the years ended December 31, 2014, 2013and 2012, respectively. The recognized impairment losses were recorded in other noninterest income in the Consolidated Statements of Income. The Bancorp's assessment of the recoverability of these asset groups requires the exercise of judgment in projecting the extent and nature of their future use and the related cash flows which may be impacted by unanticipated events or circumstances.

Gross occupancy expense for cancelable and noncancelable leases, which isincluded in net occupancy expense in the Consolidated Statements of Income,was$100 million in 2014, $98 million in2013 and$99 million in 2012, which was reduced by rental income from leased premises of $17 million in 2014, $16 million in2013 and $17 million in 2012.The Bancorp's subsidiaries have entered into a number of noncancelableoperating and capital lease agreements with respect to bank premises and equipment.

The following table provides the annual future minimum payments under noncancelable operating leases and capital leases at December 31, 2014:
($ in millions)		Noncancelable Operating Leases	Capital Leases
Year ending December 31,
2015	$	92	11
2016		87	9
2017		79	5
2018		76	5
2019		69	5
Thereafter		294	2
Total minimum lease payments	$	697	37
Less: Amounts representing interest		-	9
Present value of net minimum lease payments		-	28