Investar Holding Corp Leases Disclosure
NOTE 6. LEASES
The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s lease agreements under which its branch locations are operated have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases.
Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately, as the non-lease component amounts are readily determinable.
Quantitative information regarding the Company’s operating leases is presented below as of and for the years ended December 31, 2024 and 2023 (dollars in thousands).
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Total operating lease cost | $ | $ | 441 | |||||
| Weighted average remaining lease term (in years) | 6.8 | |||||||
| Weighted average discount rate | % | 3.2 | % | |||||
At December 31, 2024 and 2023, the Company’s operating lease were $2.0 million and $2.1 million, respectively, and the Company’s related were $2.1 million and $2.2 million, respectively. The Company’s operating leases have remaining terms ranging from approximately to years, including extension options if the Company is reasonably certain they will be exercised.
Future minimum lease payments due under non-cancelable operating leases at December 31, 2024 are presented below (dollars in thousands).
| 2025 | $ | 449 | ||
| 2026 | 401 | |||
| 2027 | 404 | |||
| 2028 | 405 | |||
| 2029 | 337 | |||
| Thereafter | 350 | |||
| Total | $ | 2,346 |
At December 31, 2024, the Company had not entered into any material leases that have not yet commenced.
The Bank owns its corporate headquarters building, the first floor of which is occupied by multiple tenants. The Bank, as lessor, also leases a portion of one of its branch locations and a former stand-alone ATM location. All tenant leases are operating leases. The Bank, as lessor, recognized lease income of $0.4 million, $0.4 million and $0.3 million in “” in the accompanying consolidated statements of income for the years ended December 31, 2024, 2023 and 2022, respectively.
On January 27, 2023, the Bank completed the sale of certain assets, deposits and other liabilities associated with the Alice and Victoria, Texas branch locations to First Community Bank. Upon the completion of the sale, the Bank recorded $0.3 million of occupancy expense to terminate the remaining contractually obligated lease payments due under non-cancelable operating leases.
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.