LEASES
Lessee Arrangements
The Company has banking and limited-service facilities, data centers, and certain equipment under lease agreements. Most of the leases expire between 2026 and 2030 and include one or more renewal options for up to 5 years. Six leases expire between 2031 and 2034. All leases are classified as operating leases.
| | | | | | | | | | | |
| Year ended December 31, |
| ($ in thousands) | 2025 | | 2024 |
| Operating lease cost | $ | 6,386 | | | $ | 5,757 | |
| Short-term lease cost | 519 | | | 402 | |
| | | |
| | | |
| Total lease cost | $ | 6,905 | | | $ | 6,159 | |
| | | |
Payments on operating leases included in the measurement of lease liabilities during the twelve months ended December 31, 2025 and 2024 totaled $6.7 million and $5.6 million, respectively. Right-of-use assets obtained in exchange for lease obligations totaled $6.5 million and $2.0 million during the twelve months ended December 31, 2025 and 2024, respectively. The additions in 2025 and 2024 were primarily from the Branch Acquisition during 2025 and lease renewals.
The following table presents supplemental balance sheet information related to leases for the periods indicated:
| | | | | | | | | | | |
| ($ in thousands) | December 31, 2025 | | December 31, 2024 |
| Operating lease right-of-use assets, included in other assets | $ | 24,031 | | | $ | 22,759 | |
| Operating lease liabilities, included in other liabilities | 27,140 | | | 26,150 | |
| | | |
| Operating leases | | | |
| Weighted average remaining lease term | 5 years | | 6 years |
| Weighted average discount rate | 4.1 | % | | 4.0 | % |
The following table summarizes the maturities of operating lease liabilities as of December 31, 2025:
| | | | | | | | |
| ($ in thousands) | | | | |
| Year | Amount | |
| 2026 | $ | 7,650 | | | | |
| 2027 | 6,630 | | | |
| 2028 | 4,668 | | | |
| 2029 | 3,282 | | | |
| 2030 | 2,655 | | | |
| Thereafter | 5,444 | | | |
| Total operating lease liabilities, payments | 30,329 | | | | |
| Less: present value adjustment | 3,189 | | | | |
| Operating lease liabilities | $ | 27,140 | | | | |
| | | | |
Lessor Arrangements
The Company leases office space to third parties through operating leases. These agreements have remaining lease terms ranging from 30 months to 84 months. Lessor income was $1.6 million and $1.9 million for the twelve months ended December 31, 2025 and 2024, respectively.
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.