HERITAGE COMMERCE CORPHTBK

HERITAGE COMMERCE CORP Leases Disclosure

10-KFiled Mar 9, 20262 min read
Leases
The Company recognizes the following for all leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use, of a specified asset for the lease term. The Company is impacted as a lessee of the offices and real estate used for operations. The Company's lease agreements include options to renew at the Company's option. No lease extensions are reasonably certain to be exercised, therefore it was not considered in the calculation of the ROU asset and lease liability. As of December 31, 2025 and December 31, 2024, operating lease ROU assets, included in other assets and lease liabilities, included in other liabilities, totaled $28,471,000 and $30,566,000, respectively.
The following table presents the quantitative information for the Company’s leases:
Year Ended
December 31,
20252024
(Dollars in thousands)
Operating Lease Cost (Cost resulting from lease payments)$6,851 $6,853 
Operating Lease - Operating Cash Flows (Fixed Payments)$6,861 $6,943 
Operating Lease - ROU assets$28,471 $30,566 
Operating Lease - Liabilities$28,471 $30,566 
Weighted Average Lease Term - Operating Leases4.60 years5.08 years
Weighted Average Discount Rate - Operating Leases5.87%5.57%
The following maturity analysis shows the undiscounted cash flows due on the Company’s operating lease liabilities as of December 31, 2025:
(Dollars in thousands)
2026$7,138 
20277,175 
20286,597 
20296,346 
20304,297 
Thereafter1,014 
Total undiscounted cash flows32,567 
Discount on cash flows(4,096)
Total lease liability$28,471 

Historical Timeline

Fiscal YearFiled
2025Mar 9, 2026Showing above
2024Mar 10, 2025
2023Mar 11, 2024
2022Mar 9, 2023
2021Mar 4, 2022
2020Mar 5, 2021
2019Mar 11, 2020
2018Mar 14, 2019
2017Mar 16, 2018
2016Mar 3, 2017
2015Mar 7, 2016

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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