Bank Premises and Equipment

6 Months Ended

Jun. 30, 2018

7. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:

($ in millions)		June 30, 2018	December 31, 2017
Land and improvements^(a)	$	599	644
Buildings^(a)		1,616	1,679
Equipment		1,936	1,876
Leasehold improvements		396	399
Construction in progress^(a)		85	93
Bank premises and equipment held for sale:
Land and improvements		24	17
Buildings		10	9
Equipment		3	1
Accumulated depreciation and amortization		(2,754)	(2,715)
Total bank premises and equipment	$	1,915	2,003

(a) At June 30, 2018 and December 31, 2017, land and improvements, buildings and construction in progress included $55 and $91, 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 in its consumer distribution 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.

During the second quarter of 2018, the Bancorp adopted a plan to close approximately 100 to 125 branches over the next three years (the “2018 Branch Optimization Plan”). As of June 30, 2018, the Bancorp had identified 29 specific branches for closure under the 2018 Branch Optimization Plan with these closures expected to be completed prior to December 31, 2018. The Bancorp expects to identify the remaining branches to be closed under the 2018 Branch Optimization Plan over the next 12 to 18 months. As part of the adoption of the 2018 Branch Optimization Plan, the Bancorp has also elected to sell 21 parcels of land which had previously been held for future branch expansion.

As a result of the adoption of the 2018 Branch Optimization Plan during the second quarter of 2018, the Bancorp performed assessments of the recoverability of the following long-lived assets for which the Bancorp believes that it is more likely than not that the assets will be disposed of significantly before the end of their previously estimated useful lives:

29 branches specifically identified for closure prior to December 31, 2018
128 branches from which the remaining closures under the 2018 Branch Optimization Plan are expected to be selected
21 parcels of land that the Bancorp has elected to sell

Impairment losses associated with such assessments and lower of cost or market adjustments were $33 million and $41 million for the three and six months ended June 30, 2018, respectively, and $2 million and $5 million for the three and six months ended June 30, 2017, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.