Leases (Notes)

12 Months Ended

Dec. 31, 2023

NOTE 13. LEASES

LESSEE

As of December 31, 2023, assets and liabilities recorded under operating leases for properties were $462 million and $535 million, respectively, and $474 million and $553 million, respectively, as of December 31, 2022. 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 $85 million, $86 million, and $87 million for the years ended December 31, 2023, 2022, and 2021 respectively.

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


	2023		2022
Weighted-average remaining lease term (years)	9.6 years		10.0 years
Weighted-average discount rate (%)	2.9	%	2.6	%

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


	December 31, 2023
	(In millions)
2024	$	92
2025	88
2026	75
2027	63
2028	51
Thereafter	262
Total lease payments	631
Less: Imputed interest	96
Total present value of lease liabilities	$	535

LESSOR

The following tables present a summary of Regions' sales-type, direct financing and leveraged leases for the years ended December 31.


	Net Interest Income
	2023		2022		2021
	(In millions)
Sales-Type and Direct Financing	$	65	$	52	$	59
Leveraged(1)	2		12		14
	$	67	$	64	$	73

_________

(1)Leveraged lease income is shown pre-tax and related tax expense is immaterial for all periods presented. Leveraged lease termination gains excluded from amounts presented above were immaterial for all periods presented.


	As of December 31, 2023
	Sales-Type and Direct Financing		Leveraged		Total
	(In millions)
Lease receivable	$	1,397	$	123	$	1,520
Unearned income	(211)		(47)		(258)
Guaranteed residual	96		—		96
Unguaranteed residual	188		118		306
Total net investment	$	1,470	$	194	$	1,664


	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

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


	December 31, 2023
	Sales-Type and Direct Financing
	(In millions)
2024	$	332
2025	268
2026	228
2027	159
2028	103
Thereafter	307
	$	1,397