LEASES
We have operating and finance leases for branches, data centers, and corporate offices, including our headquarters in Salt Lake City, Utah. At December 31, 2025, we had 407 branches, with 278 owned and 129 leased. The remaining maturities of our lease commitments range from the year 2026 to 2062, with some lease arrangements including options to extend or terminate the leases.
Leases with terms longer than twelve months are reported as a lease liability with a corresponding right-of-use (“ROU”) asset. ROU assets for operating leases and finance leases are included in “Other assets” and “Premises, equipment and software, net” on the consolidated balance sheet, respectively. The corresponding liabilities for those leases are included in “Other liabilities” and “Long-term debt,” respectively.
ROU assets and related lease liabilities represent the present value of the future minimum lease payments over the lease term as of the lease commencement date. Since most of our leases do not specify an implicit rate, we use our secured incremental borrowing rate, which is commensurate with the lease term, to calculate the present value of future payments. The ROU asset also includes lease prepayments, initial direct costs, amortization, and certain nonlease components such as maintenance, utilities, and tax payments. Our lease terms incorporate options to extend or terminate the lease when it is reasonably certain that such options will be exercised.
The following schedule presents ROU assets and lease liabilities with the associated weighted average remaining life and discount rate:
| | | | | | | | | | | | | |
| December 31, | | |
| (Dollar amounts in millions) | 2025 | | 2024 | | |
| Operating leases | | | | | |
| ROU assets, net of amortization | $ | 207 | | $ | 188 | | |
| Lease liabilities | 257 | | 240 | | |
| Finance leases | | | | | |
| ROU assets, net of amortization | 3 | | 3 | | |
| Lease liabilities | 4 | | 4 | | |
| Weighted average remaining lease term (years) | | | | | |
| Operating leases | 9.4 | | 9.9 | | |
| Finance leases | 14.7 | | 15.6 | | |
| Weighted average discount rate | | | | | |
| Operating leases | 4.0 | % | | 3.8 | % | | |
| Finance leases | 3.2 | % | | 3.1 | % | | |
The following schedule presents additional information related to lease expense:
| | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| (In millions) | | | 2025 | | 2024 | | 2023 |
| Lease expense: | | | | | | | |
| Operating lease expense | | | $ | 40 | | | $ | 40 | | | $ | 43 | |
Other expenses associated with operating leases 1 | | | 65 | | | 62 | | | 60 | |
| Total lease expense | | | $ | 105 | | | $ | 102 | | | $ | 103 | |
| Related cash disbursements for operating leases | | | $ | 42 | | | $ | 43 | | | $ | 49 | |
1 Other expenses primarily include property taxes and building and property maintenance.
The following schedule presents the total contractual undiscounted lease payments for operating lease liabilities by expected due date for each of the next five years:
| | | | | |
| (In millions) | Total undiscounted lease payments |
| |
| 2026 | $ | 42 | |
| 2027 | 34 | |
| 2028 | 35 | |
| 2029 | 32 | |
| 2030 | 29 | |
| Thereafter | 143 | |
| Total lease payments | 315 | |
| Less imputed interest | 58 | |
| Total | $ | 257 | |
We enter into certain lease agreements where we are the lessor of real estate, including bank-owned and subleased properties, to generate cash flow. This activity includes leasing vacant suites within buildings that we partially occupy. Operating lease income totaled $15 million, $13 million, and $14 million in 2025, 2024, and 2023, respectively.
At December 31, 2025 and 2024, we originated equipment leases classified as sales-type or direct-financing leases totaling $367 million and $377 million, respectively. Income from these leases was $19 million, $18 million, and $16 million during 2025, 2024, and 2023, respectively.