Merchants Bancorp Leases Disclosure
Note 10: Leases
The Company has operating leases for various locations with terms ranging from to six years. Some operating leases include options to extend. The extensions were included in the ROU asset if the likelihood of extension was reasonably certain. The Company elected not to separate non-lease components from lease components for its operating leases.
Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2025 and 2024:
December 31, 2025 | December 31, 2024 | ||||||
(In thousands) | |||||||
Balance Sheet | | ||||||
$ | 6,006 | $ | 8,332 | ||||
7,264 | 9,303 | ||||||
Weighted average remaining lease term (years) | 3.7 | 4.6 | |||||
Weighted average discount rate | 3.44% | 3.43% | |||||
The table below presents the components of lease expenses for the years ended December 31, 2025, 2024, and 2023. Operating lease expenses are included in occupancy and equipment expense on the consolidated income statements.
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
(In thousands) | |||||||||
Statement of Income | |||||||||
Components of lease expense: | |||||||||
Operating lease cost | $ | 3,402 | $ | 2,692 | $ | 2,438 | |||
As of December 31, 2025, the Company has forward-starting with total net future minimum lease payments of $10.7 million. These leases commence on dates ranging between March 1, and April 1, 2026, and obligate the Company to use and pay for space over to ten years upon commencement. No ROU asset or lease liability has been recorded at year-end because the leases have not commenced.
Supplemental cash flow information related to leases is presented in the tables below.
December 31, 2025 | |||
(In thousands) | |||
Maturities of operating lease liabilities: | |||
One year or less | $ | 2,293 | |
Year two | 2,203 | ||
Year three | 1,597 | ||
Year four | 1,101 | ||
Year five | 419 | ||
Thereafter | 128 | ||
Total future minimum lease payments | $ | 7,741 | |
Less: imputed interest | 477 | ||
Total | $ | 7,264 | |
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
(In thousands) | |||||||||
Statement of Cash Flow | |||||||||
Supplemental cash flow information: | |||||||||
Operating cash flows from operating leases | $ | 2,325 | $ | 2,505 | $ | 2,129 | |||
Change in ROU assets due to lease renegotiation | — | (1,063) | — | ||||||
ROU assets obtained in exchange for new operating lease liabilities | — | 1,337 | 1,113 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 16, 2023 | |
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.