Note 12 – Leases

The Company records a right of use asset (“ROU”) and a lease liability for all leases with terms longer than 12 months. The Company has elected the short-term lease recognition exemption such that the Company will not recognize ROU or lease liabilities for leases with a term less than 12 months from the commencement date. The Company is obligated under 30 operating leases agreements for 28 branches and its corporate offices with terms extending through 2042. The Company’s lease agreements include options to renew at the Company’s discretion. The extensions are reasonably certain to be exercised, therefore they were considered in the calculations of the ROU asset and lease liability.

The following table represents the classification of the Company’s right of use and lease liabilities (Dollars in thousands):


	Statement of Financial Condition Location		December 31, 2024			December 31, 2023
			(In thousands)
Operating Lease Right of Use Asset:
Gross carrying amount beginning of year			$	23,398		$	16,026
Increased asset from new leases				3,066			9,799
Accumulated amortization				(4,561	)		(2,427	)


Net book value end of year		Operating lease right-of-use asset	$	21,903		$	23,398


Operating Lease Liability:

Lease liability		Operating lease liability	$	22,941		$	24,280

For the year ended December 31, 2024, the weighted-average remaining lease terms for operating leases was 11.02 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.53 %. The Company used current FHLB fixed rate advances at the time the lease was placed in service for the term most closely aligning with remaining lease term to determine the discount rate.

The following table presents total lease cost and cash paid for each year:


	Twelve Months Ended December 31,
	2024		2023
	(In thousands)
Lease cost:
Operating lease	$	4,094	$	3,772
Short-term lease cost		124		105

Total lease cost	$	4,218	$	3,877


Other information:

Cash paid for amounts included in the measurement of lease liabilities	$	3,572	$	3,074

Future minimum payments under operating leases with terms longer than 12 months are as follows at December 31, 2024:


	Amount
Twelve months ended December 31,	(In thousands)
2025	$	3,722
2026		3,498
2027		3,208
2028		3,093
2029		2,467
Thereafter		14,541

Total future operating lease payment		30,529
Amounts representing interest		(7,588	)

Present value of net future lease payments	$	22,941

The Company has an operating lease agreement with a member of the Company’s board of directors for a building containing the Company’s corporate headquarters and branch, which is included in the above lease schedule. At the lease initiation date, the lease terms were comparable to similarly outfitted office space in the Company’s market. Base rental payments of $275 thousand and $315 thousand were made to this related party in each of the years ended December 31, 2024 and 2023, respectively. Certain operating expenses, including real estate taxes, insurance, utilities, maintenance and repairs, related to this property are paid directly to the various service providers.

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.

Princeton Bancorp, Inc. Leases Disclosure

About Leases Disclosures

Other Available Disclosures