LeasesThe Company's noncancelable operating lease agreements relate to certain banking offices, back-office operational facilities, office equipment and sublease agreements. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule. As of December 31, 2025 and December 31, 2024, the Company’s operating lease ROU asset was $19.8 million and $22.4 million, respectively, and is included in "Prepaid expenses and other assets" in the Consolidated Statements of Financial Condition. The related operating lease ROU liability was $22.4 million and $24.9 million, respectively and is included in "Accrued expenses and other liabilities" in the Consolidated Statements of Financial Condition. In addition, the Company has one operating sublease agreement in which the Company is the intermediate lessor. The operating sublease is for five years with rental increases on a predetermined escalation schedule with a projected future cash flow of $900,000 at December 31, 2025. The Company did not have any leases designated as finance leases at December 31, 2025.
The table below summarizes the information about our leases during the periods or at period end presented:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 |
| (Dollars in thousands) |
| Operating lease cost | $ | 5,564 | | | $ | 5,458 | |
| Short-term lease cost | 110 | | | 61 | |
| Variable lease cost | 1,283 | | | 1,255 | |
| Sublease income | (396) | | | (393) | |
| Total net lease cost during the period | $ | 6,561 | | | $ | 6,381 | |
| | | |
| Operating cash used for amounts included in the measurement of lease liabilities during the period | $ | 5,309 | | | $ | 4,890 | |
| ROU assets obtained in exchange for lease liabilities during the period | 3,937 | | | 3,504 | |
| | | |
| Weighted average remaining lease term of operating leases, in years, at period end | 6.0 | | 5.8 |
| Weighted average discount rate of operating leases, at period end | 3.59 | % | | 3.24 | % |
The following table presents the lease payment obligations as of December 31, 2025 as outlined in the Company’s lease agreements for each of the next five years and thereafter, in thousands:
| | | | | |
| |
| |
| 2026 | $ | 4,846 | |
| 2027 | 5,154 | |
| 2028 | 3,355 | |
| 2029 | 2,957 | |
| 2030 | 2,722 | |
| Thereafter | 6,248 | |
| Total lease payments | 25,282 | |
| Imputed interest | (2,899) | |
| ROU liability | $ | 22,383 | |
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.