Leases (Notes)

12 Months Ended

Dec. 31, 2022

LESSEE

As of December 31, 2022, assets and liabilities recorded under operating leases for properties were $474 million and $553 million, respectively, and $459 million and $529 million, respectively, as of December 31, 2021. The difference between the asset and liability balance is largely driven by increases in rent over the lease term and any strategic decisions to exit a lease location early, resulting in derecognition of the asset. The asset is recorded within other assets, and the lease liability is recorded within other liabilities on the consolidated balance sheets. Lease expense, which is operating lease costs recorded within net occupancy expense, was $86 million, $87 million, and $85 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Other information related to operating leases at December 31 is as follows:


	2022		2021
Weighted-average remaining lease term (years)	10.0 years		9.9 years
Weighted-average discount rate (%)	2.6	%	2.5	%

Future, undiscounted minimum lease payments on operating leases are as follows:


	December 31, 2022
	(In millions)
2023	$	95
2024	86
2025	78
2026	64
2027	53
Thereafter	277
Total lease payments	653
Less: Imputed interest	100
Total present value of lease liabilities	$	553

LESSOR

The following tables present a summary of Regions' sales-type, direct financing and leveraged leases for the years ended December 31. Due to the immaterial nature of operating leases on the consolidated financial statements, prior periods have been revised to reflect the December 31, 2022 presentation.


	Net Interest Income
	2022		2021		2020
	(In millions)
Sales-Type and Direct Financing	$	52	$	59	$	67
Leveraged(1)	12		14		14
	$	64	$	73	$	81

_________

(1)Leveraged lease income is shown pre-tax with related tax expense of $7 million for December 31, 2022 and $8 million for both December 31, 2021 and 2020, respectively. Leveraged lease termination gains excluded from amounts presented above were immaterial for all periods presented.


	As of December 31, 2022
	Sales-Type and Direct Financing		Leveraged		Total
	(In millions)
Lease receivable	$	1,236	$	140	$	1,376
Unearned income	(189)		(62)		(251)
Guaranteed residual	71		—		71
Unguaranteed residual	173		134		307
Total net investment	$	1,291	$	212	$	1,503


	As of December 31, 2021
	Sales-Type and Direct Financing		Leveraged		Total
	(In millions)
Lease receivable	$	1,231	$	159	$	1,390
Unearned income	(198)		(76)		(274)
Guaranteed residual	49		—		49
Unguaranteed residual	213		137		350
Total net investment	$	1,295	$	220	$	1,515

The following table presents the minimum future payments due from customers for sales-type and direct financing leases:


	December 31, 2022
	Sales-Type and Direct Financing
	(In millions)
2023	$	289
2024	211
2025	166
2026	125
2027	101
Thereafter	344
	$	1,236