COLONY BANKCORP INCCBAN

COLONY BANKCORP INC Leases Disclosure

10-KFiled Mar 13, 20263 min read
LEASES
 
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU No. 2016-2 and all subsequent ASUs that modified this topic (collectively referred to as “Topic 842”). For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.
 
Substantially all of the leases in which the Company is the lessee are comprised of real estate for branches and office space with terms extending through 2040. All of our leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated balance sheet. With the adoption of Topic 842, operating lease arrangements are required to be recognized on the consolidated balance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability.
 
The following table represents the consolidated balance sheet classification of the Company’s ROU assets and liabilities. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated balance sheet.
 
(dollars in thousands)ClassificationDecember 31, 2025December 31, 2024
Assets  
Operating lease right-of-use assetsOther assets$10,257 $1,225 
   
Liabilities  
Operating lease liabilitiesOther liabilities $10,327 $1,319 
 
The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments and lease incentive payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. 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. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.
 
For the years ended December 31, 2025 and 2024, operating lease cost was $764,000 and $531,000, respectively.
 
As of December 31, 2025, the weighted average remaining lease term was 12.30 years and the weighted average discount rate was 4.61%.
 
The following table represents the future maturities of the Company’s operating lease liabilities and other lease information.
 
(dollars in thousands) 
YearLease Liability
2026$1,387 
20271,305 
20281,081 
20291,020 
2030961 
Thereafter8,021 
Total Lease Payments$13,775 
Less: Imputed Interest(3,448)
Present Value of Lease Liabilities$10,327 
 
Supplemental Lease Information: (dollars in thousands)
December 31, 2025December 31, 2024
Cash paid for amounts included in the measurement of lease liabilities: 
Operating cash flows from operating leases (cash payments)$764 $659 
Operating lease right-of-use assets obtained in exchange for leases entered into during the period9,682 *76 
   *Includes $9.4 million assumed in business acquisition

Historical Timeline

Fiscal YearFiled
2025Mar 13, 2026Showing above
2024Mar 14, 2025
2023Mar 14, 2024
2022Mar 16, 2023
2021Mar 18, 2022
2020Mar 23, 2021
2019Mar 30, 2020

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.

Other Available Disclosures

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