BayCom Corp Leases Disclosure
7. LEASES
The Company owned 15 of its banking branches and leased the remaining 20 branches under noncancelable operating leases as of December 31, 2024. These leases expire on various dates through 2030. The Company’s leases often have an option to renew one or more times, at the Company’s discretion, following the expiration of the initial term. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company uses the rate implicit in the lease whenever this rate is readily determinable. As this rate is not readily determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.
The below maturity schedule represents the undiscounted lease payments for the five-year period and thereafter as of December 31, 2024:
Year ending December 31, | |||
2025 | $ | 3,897 | |
2026 |
| 3,329 | |
2027 |
| 2,911 | |
2028 | 2,769 | ||
Thereafter |
| 2,763 | |
Total undiscounted cash flows | 15,669 | ||
Less: interest | (1,286) | ||
Present value of lease payments | $ | 14,383 |
The following table presents the remaining weighted average lease term and discount rate at the date indicated:
| December 31, 2024 | December 31, 2023 | ||||
Weighted-average remaining lease term |
| 4.5 | years | 4.8 | years | |
Weighted-average discount rate |
| 3.8 | % | 3.4 | % | |
The following table presents certain information related to the operating lease costs included in occupancy and equipment expense on the consolidated statements of income for the dates indicated:
| December 31, | December 31, | December 31, | ||||||
2024 | 2023 | 2022 | |||||||
Operating lease cost | $ | 4,053 | $ | 3,870 | $ | 3,825 | |||
Short-term lease cost |
| 15 |
| 112 |
| 299 | |||
Variable lease cost |
| — |
| — |
| 17 | |||
Less: Sublease income |
| (96) |
| (83) |
| (88) | |||
Total operating lease cost, net | $ | 3,972 | $ | 3,899 | $ | 4,053 | |||
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About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.