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VARIABLE INTEREST ENTITIES | 12 Months Ended
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Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract] |
VARIABLE INTEREST ENTITIES | NOTE 11 - VARIABLE INTEREST ENTITIES The Company, in the normal course of business, engages in a variety of activities with entities that are considered VIEs, as defined by GAAP, with its variable interest arising from contractual, ownership or other monetary interests in the entity. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company is the primary beneficiary of a VIE, and must consolidate it, if its variable interest provides it with the power to direct the activities that significantly impact the VIE and it has the right to receive benefits, or the obligation to absorb losses, that could potentially be significant to the VIE. Both qualitative and quantitative factors are considered regarding the nature, size and form of involvement with the VIE to determine whether or not a variable interest held is significant to the VIE. The Company assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Transfers of financial assets in which the Company has not surrendered control over the transferred assets are accounted for as a secured borrowing with a pledge of collateral. Control is generally considered surrendered when 1) the transferred assets are legally isolated from the Company and its creditors, even in bankruptcy, 2) the transferee has the right to pledge or exchange the transferred assets it received, with no condition that constrains the transferee from taking advantage of this right or that provides more than a trivial benefit to the Company, and 3) the Company does not maintain effective control over the transferred financial assets. Judgment is required to assess whether the Company maintains effective control over transferred financial assets. Consolidated VIEs The Company has consolidated VIEs related to secured borrowings collateralized by auto loans. The following table summarizes the carrying amount of assets and liabilities for the Company’s consolidated VIEs:
(dollars in millions) | December 31, 2024 |  | December 31, 2023
Assets: |  |  |
Cash and due from banks | $— |  |  | $13 |
Interest-bearing deposits in banks | 209 |  |  | 106 |
Net loans and leases | 3,843 |  |  | 3,194 |
Other assets | 21 |  |  | 14 |
Total assets | $4,073 |  |  | $3,327 |
Liabilities: |  |  |
Long-term borrowed funds | $3,375 |  |  | $2,692 |
Other liabilities | 8 |  |  | 8 |
Total liabilities | $3,383 |  |  | $2,700 |
Secured Borrowings The Company utilizes a portion of its auto loan portfolio to support certain secured borrowing arrangements, which provide a source of funding for the Company and involves the transfer of auto loans to bankruptcy remote special purpose entities (“SPEs”). These SPEs then issue asset-backed notes to third-parties collateralized by the transferred loans. The Company holds certain residual interests in the loans and, therefore, has a right to receive benefits or the obligation to absorb losses that could potentially be significant to the SPEs. In addition, the Company retains servicing for the transferred loans and, therefore, holds the power to direct significant activities that impact the economic performance of the SPEs. As a result, the Company concluded that it is the primary beneficiary of these SPEs and, accordingly, consolidates these VIEs. The assets of a particular VIE are the primary source of funds to settle its obligations. Creditors of these VIEs do not have recourse to the general credit of the Company. The performance of the loans transferred to the SPEs is the most significant driver impacting the economic performance of the VIEs. Unconsolidated VIEs The Company is involved with various VIEs that are not consolidated, including lending to special purpose entities, investments in asset-backed securities and investments in entities that sponsor affordable housing, renewable energy and economic development projects. The Company’s maximum exposure to loss resulting from its involvement with these entities is limited to the balance sheet carrying amount of its investments, unfunded commitments, and the outstanding principal balance of loans to special purpose entities. A summary of these investments is presented below:
| December 31,
(dollars in millions) | 2024 |  | 2023
Lending to special purpose entities included in loans and leases | $4,215 |  |  | $4,760 |
LIHTC investments included in other assets | 2,631 |  |  | 2,444 |
LIHTC unfunded commitments included in other liabilities | 1,109 |  |  | 1,025 |
Asset-backed investments included in HTM securities | 412 |  |  | 488 |
Renewable energy investments included in other assets | 269 |  |  | 314 |
NMTC investments included in other assets | 2 |  |  | 3 |
Lending to Special Purpose Entities The Company provides lending facilities to third-party sponsored special purpose entities. The sponsor for each respective entity has the power to direct how proceeds from the Company are utilized and maintains responsibility for any associated servicing commitments. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs. As of December 31, 2024 and 2023, the lending facilities had undrawn commitments to extend credit of $2.8 billion and $2.7 billion, respectively. For more information on commitments to extend credit see Note 19. Asset-backed securities The Company’s investments in asset-backed securities are collateralized by education loans sold to a third-party sponsored VIE. The Company acts as the primary servicer for the sold loans and receives a servicing fee. A third-party servicer is responsible for all loans that become significantly delinquent. The Company’s investments in asset-backed securities, as well as the primary servicing fee, are considered variable interests in the VIE since some of the losses of the VIE could be absorbed by the Company’s interest in the asset-backed securities or the primary servicing fee. However, the Company does not control the determination of the assets purchased by the VIE and the servicing activities on significantly delinquent loans. Since these activities significantly impact the economic performance of the VIE, the Company has concluded that it is not the primary beneficiary of this VIE and, accordingly, does not consolidate the VIE. Low Income Housing Tax Credit Partnerships The purpose of the Company’s LIHTC investments is to assist in achieving the goals of the CRA and to earn an adequate return of capital. LIHTC partnerships are managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. Therefore, the Company is not the primary beneficiary of these partnerships and, accordingly, does not consolidate these VIEs. Renewable Energy Entities The Company’s investments in certain renewable energy entities provide benefits from government incentives and other tax attributes (e.g., tax depreciation). As a tax equity investor, the Company does not have the power to direct the activities which most significantly affect the performance of these entities. Therefore, the Company is not the primary beneficiary of these entities and, accordingly, does not consolidate these VIEs. Contingent commitments related to the Company’s renewable energy investments were $49 million at December 31, 2024, and are expected to be paid in varying amounts through 2027. These payments are contingent upon the level of electricity production attained by the renewable energy entity relative to its targeted threshold and changes in the production tax credit rates set by the Internal Revenue Service. New Markets Tax Credit Program The Company participates in the NMTC program which provides a tax incentive for private sector investment into economic development projects and businesses located in low-income communities. The Company’s investments in entities that sponsor economic development projects provide income tax credits to offset federal taxable income over a specified period of time. Independent third parties manage these entities and have the power to direct the activities which most significantly affect their performance. Therefore, the Company is not the primary beneficiary of these entities and does not consolidate these VIEs as a result. The Company applies the proportional amortization method to account for its LIHTC, renewable energy and NMTC investments. Under the proportional amortization method, the Company applies a practical expedient for its LIHTC and NMTC investments and amortizes the initial cost of qualifying investments in proportion to the income tax credits received in the current period as compared to the total income tax credits expected to be received over the life of the investment. For renewable energy investments, the Company amortizes the initial cost of qualifying investments in proportion to the income tax credits and other income tax benefits received in the current period as compared to the total income tax credits and other income tax benefits expected to be received over the life of the investment. The net amortization and income tax credits and other income tax benefits received are included as a component of income tax expense (benefit). The following table summarizes the impact to the Consolidated Statements of Operations relative to the Company’s tax credit programs for which it has elected to apply the proportional amortization method of accounting:
| Year Ended December 31,
(dollars in millions) | 2024 |  | 2023 |  | 2022
Tax credits recognized | $379 |  |  | $334 |  |  | $236 |
Other tax benefits recognized | 93 |  |  | 71 |  |  | 59 |
Amortization | (363) |  |  | (320) |  |  | (247) |
Net benefit (expense) included in income tax expense | 109 |  |  | 85 |  |  | 48 |
Other income | 4 |  |  | 5 |  |  | — |
Allocated income (loss) on investments | (12) |  |  | (10) |  |  | — |
Net benefit (expense) included in noninterest income | (8) |  |  | (5) |  |  | — |
Net benefit (expense) included in the Consolidated Statements of Operations(1) | $101 |  |  | $80 |  |  | $48 |
(1) Includes the impact of tax credit investments when the election to apply the proportional amortization method was in effect during the periods presented. For 2024 and 2023, this includes LIHTC, renewable energy and NMTC investments, and for 2022, includes LIHTC investments. The Company did not recognize impairment losses resulting from the forfeiture or ineligibility of income tax credits or other circumstances during the years ended December 31, 2024, 2023 and 2022.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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