Note 8 — Leases
The Company leases certain real estate, as well as certain equipment, under non-cancelable operating leases that expire at various dates through 2052.
The consolidated balance sheets detail and components of the Company’s lease expense were as follows:
| | | | | | | | | | | |
| (Dollars in thousands) | December 31, 2025 | | December 31, 2024 |
| Operating lease right of use assets (included in Accrued interest receivable and other assets) | $ | 51,883 | | | $ | 52,832 | |
| Operating lease liabilities (included in Accrued expenses and other liabilities) | 55,926 | | | 55,999 | |
| Finance lease right of use assets (included in Premises and equipment, net) | 1,586 | | | 1,862 | |
| Finance lease liabilities (included in Accrued expenses and other liabilities) | 1,661 | | | 1,932 | |
| | | |
| Weighted average remaining lease term (years) - operating leases | 10.39 | | 11.18 |
| Weighted average discount rate - operating leases | 4.29 | % | | 4.21 | % |
| | | | | | | | | | | | | | | | | | |
| Years Ended December 31, | |
| (Dollars in thousands) | 2025 | | 2024 | | 2023 | |
| Lease expense: | | | | | | |
| Operating lease expense | $ | 8,299 | | | $ | 7,916 | | | $ | 7,884 | | |
| Other lease expense | 355 | | | 356 | | | 360 | | |
| Total lease expense | 8,654 | | | 8,272 | | | 8,244 | | |
| Sublease income | 577 | | | 339 | | | 231 | | |
| Net lease expense | $ | 8,077 | | | $ | 7,933 | | | $ | 8,013 | | |
| Right of use assets obtained in exchange for new operating lease liabilities | $ | 4,549 | | | $ | 11,454 | | | $ | 20,568 | | |
Maturities of operating lease liabilities at December 31, 2025, were as follows:
| | | | | |
| (Dollars in thousands) | December 31, 2025 |
| 2026 | $ | 7,925 | |
| 2027 | 7,820 | |
| 2028 | 7,592 | |
| 2029 | 6,574 | |
| 2030 | 6,443 | |
| Thereafter | 34,361 | |
| Total lease payments | 70,715 | |
| Less: Imputed interest | 14,789 | |
| Total lease obligations | $ | 55,926 | |
The Company subleases commercial office spaces to tenants under operating leases. Future lease payments at December 31, 2025, are as follows:
| | | | | |
| (Dollars in thousands) | December 31, 2025 |
| 2026 | $ | 607 | |
| 2027 | 615 | |
| 2028 | 563 | |
| 2029 | 455 | |
| 2030 | 431 | |
| Thereafter | 960 | |
| Total | $ | 3,631 | |
Supplemental cash flow related to leases was as follows:
| | | | | | | | | | | |
| Years Ended |
| (Dollars in thousands) | December 31, 2025 | | December 31, 2024 |
| Cash paid for operating leases | $ | 7,353 | | | $ | 7,375 | |
| | | |
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.