FARMERS & MERCHANTS BANCORP INC Leases Disclosure
Note 6 - Leases
The Bank leases space for retail branches, LPOs and ATMs. Our leases have remaining lease terms of 4 months to just under 13 years, some of which may include options to renew the leases and some of which may include options to terminate the leases prior to the end date of the lease term. The Bank does receive rental income for the leasing of available space.
The below tables provide information on the Bank’s operating leases:
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|
(In Thousands) |
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|
December 31, 2025 |
|
|
December 31, 2024 |
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|
December 31, 2023 |
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|||
Operating lease cost (1) |
|
$ |
1,125 |
|
|
$ |
979 |
|
|
$ |
540 |
|
Operating cash flows (2) |
|
$ |
90 |
|
|
$ |
42 |
|
|
$ |
45 |
|
|
|
|
|
|
|
|
|
|
|
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(1) Included in net occupancy expense on Company's consolidated statement of income |
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(2) Included in customer service fees on Company's consolidated statement of income |
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|
(In Thousands) |
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|||||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
(1) |
|
$ |
5,594 |
|
|
$ |
6,403 |
|
(2) |
|
$ |
5,740 |
|
|
$ |
6,403 |
|
|
|
|
|
|
|
|
||
(1) Included in other assets on Company's consolidated balance sheets |
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(2) Included in accrued interest and other liabilities on Company's consolidated balance sheets |
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Operating lease term and discount rates of our lessee arrangements at December 31, 2025 and 2024 were as follows:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Weighted average remaining lease term (years) |
|
|
8.12 |
|
|
|
11.07 |
|
Weighted average discount rate |
|
|
4.46 |
% |
|
|
5.49 |
% |
The future lease payments based on maturity for our lessee liability arrangements at December 31, 2025 are as follows:
|
|
(In Thousands) |
|
|
2026 |
|
$ |
962 |
|
2027 |
|
|
911 |
|
2028 |
|
|
832 |
|
2029 |
|
|
776 |
|
2030 |
|
|
779 |
|
2031 and thereafter |
|
|
2,555 |
|
Total future lease payments |
|
$ |
6,815 |
|
Less: interest |
|
|
1,075 |
|
Present value of operating lease liability arrangements |
|
$ |
5,740 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
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.