v3.25.4
Leases, Premises and Equipment
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases, Premises and Equipment Leases, Premises and Equipment
Lessor Arrangements

We provide direct financing leases for equipment included in our commercial loan portfolio.

Interest income on lease financing is recorded over the lease term and recorded in Interest income - Loans and leases on the Consolidated Statements of (Loss) Income. The following table presents our interest income on lease financing:
Year Ended December 31,
202520242023
Interest income on lease financing
$93 $136 $119 

The components of our gross investment in direct financing leases are shown below:

December 31,
20252024
Lease payments receivable
$1,534 $2,039 
Unguaranteed residual assets (1)
266 285 
Gross investment in direct financing leases
$1,800 $2,324 
(1)The amount of residual value insurance in place at December 31, 2025 and December 31, 2024 was insignificant.
The following table presents the remaining maturity analysis of the undiscounted lease receivables, as well as the reconciliation to the total amount of receivables recognized in the Consolidated Statements of Condition:

December 31, 2025
2026$445 
2027441 
2028279 
2029220 
2030145 
Thereafter270 
Gross investment in direct financing leases$1,800 
Plus: deferred origination costs27 
Less: unearned income(129)
Less: purchase accounting adjustment(28)
Less: other
(10)
Total lease finance receivables, net$1,660 

Lessee Arrangements
We have operating leases for offices, branches, equipment and other items, generally with terms of 20 years or less. Many of our leases contain options to extend or terminate early and we consider these options when evaluating the lease term to determine if they are reasonably certain to be exercised based on all relevant economic and financial factors.

At lease inception, lease liabilities are recognized in Other liabilities based on the present value of remaining lease payments, discounted using our incremental borrowing rate if no implicit rate in the lease is available. Right-of-use assets, recognized in Other assets, represent our right to use an underlying asset for the lease term and are initially equal to the lease liability, adjusted for any payments made prior to lease commencement and any lease incentives.

Variable costs such as the proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease costs are recorded in Occupancy and Equipment on the Consolidated Statements of (Loss) Income and costs were as follows:
Year Ended December 31,
202520242023
Operating lease cost
$77 $75 $86 

Supplemental balance sheet information related to our operating lease arrangements is presented below:

December 31,
20252024
Operating Leases:
Operating lease right-of-use assets
$380 $416 
Operating lease liabilities
$427 $463 
Weighted average remaining lease term10.1 years10.7 years
Weighted average discount rate %4.79 %4.77 %
The table below presents the supplemental cash flow information related to the leases:

Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$76 $71 $64 
The following table presents the remaining maturity analysis of our lease liabilities, as well as the reconciliation to the total present value of the lease liability recorded in Other liabilities on the Consolidated Statements of Condition:
December 31, 2025
Maturities of lease liabilities:
2026$70 
202764 
202857 
202951 
203044 
Thereafter261 
Total lease payments$547 
Less: imputed interest(120)
Total present value of lease liabilities$427 

Premises and Equipment

The table below presents our Premises and equipment:
December 31,
20252024
Premises and equipment
$1,009 $1,131 
Less: Accumulated depreciation
(532)(569)
Premises and equipment, net
$477 $562 

The table below presents our Depreciation expense:
Year Ended December 31,
202520242023
Depreciation expense(1)
$41 $48 $39 
(1)Included in Occupancy and equipment expense in the Consolidated Statements of (Loss) Income.

In 2024, management approved the closure of certain PCG locations and retail branches which was a triggering event for potential impairment. We determined the value of the assets were not fully recoverable, determined the fair value and recorded an associated impairment of $46 million during the year ended 2024. Additionally, the Troy and Cleveland operational centers were classified as held for sale during 2024 and recorded at their fair value, resulting in a $31 million impairment expense included within Non-interest expense - General and administrative expenses.
Leases, Premises and Equipment Leases, Premises and Equipment
Lessor Arrangements

We provide direct financing leases for equipment included in our commercial loan portfolio.

Interest income on lease financing is recorded over the lease term and recorded in Interest income - Loans and leases on the Consolidated Statements of (Loss) Income. The following table presents our interest income on lease financing:
Year Ended December 31,
202520242023
Interest income on lease financing
$93 $136 $119 

The components of our gross investment in direct financing leases are shown below:

December 31,
20252024
Lease payments receivable
$1,534 $2,039 
Unguaranteed residual assets (1)
266 285 
Gross investment in direct financing leases
$1,800 $2,324 
(1)The amount of residual value insurance in place at December 31, 2025 and December 31, 2024 was insignificant.
The following table presents the remaining maturity analysis of the undiscounted lease receivables, as well as the reconciliation to the total amount of receivables recognized in the Consolidated Statements of Condition:

December 31, 2025
2026$445 
2027441 
2028279 
2029220 
2030145 
Thereafter270 
Gross investment in direct financing leases$1,800 
Plus: deferred origination costs27 
Less: unearned income(129)
Less: purchase accounting adjustment(28)
Less: other
(10)
Total lease finance receivables, net$1,660 

Lessee Arrangements
We have operating leases for offices, branches, equipment and other items, generally with terms of 20 years or less. Many of our leases contain options to extend or terminate early and we consider these options when evaluating the lease term to determine if they are reasonably certain to be exercised based on all relevant economic and financial factors.

At lease inception, lease liabilities are recognized in Other liabilities based on the present value of remaining lease payments, discounted using our incremental borrowing rate if no implicit rate in the lease is available. Right-of-use assets, recognized in Other assets, represent our right to use an underlying asset for the lease term and are initially equal to the lease liability, adjusted for any payments made prior to lease commencement and any lease incentives.

Variable costs such as the proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease costs are recorded in Occupancy and Equipment on the Consolidated Statements of (Loss) Income and costs were as follows:
Year Ended December 31,
202520242023
Operating lease cost
$77 $75 $86 

Supplemental balance sheet information related to our operating lease arrangements is presented below:

December 31,
20252024
Operating Leases:
Operating lease right-of-use assets
$380 $416 
Operating lease liabilities
$427 $463 
Weighted average remaining lease term10.1 years10.7 years
Weighted average discount rate %4.79 %4.77 %
The table below presents the supplemental cash flow information related to the leases:

Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$76 $71 $64 
The following table presents the remaining maturity analysis of our lease liabilities, as well as the reconciliation to the total present value of the lease liability recorded in Other liabilities on the Consolidated Statements of Condition:
December 31, 2025
Maturities of lease liabilities:
2026$70 
202764 
202857 
202951 
203044 
Thereafter261 
Total lease payments$547 
Less: imputed interest(120)
Total present value of lease liabilities$427 

Premises and Equipment

The table below presents our Premises and equipment:
December 31,
20252024
Premises and equipment
$1,009 $1,131 
Less: Accumulated depreciation
(532)(569)
Premises and equipment, net
$477 $562 

The table below presents our Depreciation expense:
Year Ended December 31,
202520242023
Depreciation expense(1)
$41 $48 $39 
(1)Included in Occupancy and equipment expense in the Consolidated Statements of (Loss) Income.

In 2024, management approved the closure of certain PCG locations and retail branches which was a triggering event for potential impairment. We determined the value of the assets were not fully recoverable, determined the fair value and recorded an associated impairment of $46 million during the year ended 2024. Additionally, the Troy and Cleveland operational centers were classified as held for sale during 2024 and recorded at their fair value, resulting in a $31 million impairment expense included within Non-interest expense - General and administrative expenses.