Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

9. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 149 of our 2021 Form 10-K.

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the income statement. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2022		2021		2022		2021
Sales-type and direct financing leases
Interest income on lease receivable	$	16	$	13	$	47	$	59
Interest income related to accretion of unguaranteed residual asset	3		9		11		12
Total sales-type and direct financing lease income	$	19	$	22	$	58	$	71
Operating leases
Operating lease income related to lease payments	$	25	$	31	$	81	$	95
Other operating leasing gains	(6)		6		(2)		16
Total operating lease income and other leasing gains	19		37		79		111
Total lease income	$	38	$	59	$	137	$	182

Leases

9. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 149 of our 2021 Form 10-K.

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the income statement. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2022		2021		2022		2021
Sales-type and direct financing leases
Interest income on lease receivable	$	16	$	13	$	47	$	59
Interest income related to accretion of unguaranteed residual asset	3		9		11		12
Total sales-type and direct financing lease income	$	19	$	22	$	58	$	71
Operating leases
Operating lease income related to lease payments	$	25	$	31	$	81	$	95
Other operating leasing gains	(6)		6		(2)		16
Total operating lease income and other leasing gains	19		37		79		111
Total lease income	$	38	$	59	$	137	$	182

Leases

9. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 149 of our 2021 Form 10-K.

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the income statement. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2022		2021		2022		2021
Sales-type and direct financing leases
Interest income on lease receivable	$	16	$	13	$	47	$	59
Interest income related to accretion of unguaranteed residual asset	3		9		11		12
Total sales-type and direct financing lease income	$	19	$	22	$	58	$	71
Operating leases
Operating lease income related to lease payments	$	25	$	31	$	81	$	95
Other operating leasing gains	(6)		6		(2)		16
Total operating lease income and other leasing gains	19		37		79		111
Total lease income	$	38	$	59	$	137	$	182

Leases

9. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 149 of our 2021 Form 10-K.

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the income statement. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2022		2021		2022		2021
Sales-type and direct financing leases
Interest income on lease receivable	$	16	$	13	$	47	$	59
Interest income related to accretion of unguaranteed residual asset	3		9		11		12
Total sales-type and direct financing lease income	$	19	$	22	$	58	$	71
Operating leases
Operating lease income related to lease payments	$	25	$	31	$	81	$	95
Other operating leasing gains	(6)		6		(2)		16
Total operating lease income and other leasing gains	19		37		79		111
Total lease income	$	38	$	59	$	137	$	182

Leases

9. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business. For more information on our leasing activity, see Note 10 (“Leases”) beginning on page 149 of our 2021 Form 10-K.

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the income statement. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

	Three months ended September 30,				Nine months ended September 30,
Dollars in millions	2022		2021		2022		2021
Sales-type and direct financing leases
Interest income on lease receivable	$	16	$	13	$	47	$	59
Interest income related to accretion of unguaranteed residual asset	3		9		11		12
Total sales-type and direct financing lease income	$	19	$	22	$	58	$	71
Operating leases
Operating lease income related to lease payments	$	25	$	31	$	81	$	95
Other operating leasing gains	(6)		6		(2)		16
Total operating lease income and other leasing gains	19		37		79		111
Total lease income	$	38	$	59	$	137	$	182