Orange County Bancorp, Inc. /DE/ Leases Disclosure
Note 14 — Leases
The Company enters into leases in the normal course of business primarily for financial centers, back-office operations locations, business development offices, and information technology equipment. The Company’s leases have remaining terms from to ten years, some of which include renewal or termination options to extend the lease up to five years and some include options to terminate the lease upon notification. The Company has no leases that are subject to sub-lease agreements. The Company’s leases do not include residual value guarantees or covenants.
The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the option. In addition, the Company has elected to account for any non-lease components in its real estate leases as part of the associated lease component. The Company has also elected to not recognize leases with original lease terms of twelve months or less (short-term leases) on the Company’s balance sheet.
Leases are classified as operating or financing leases at the lease commencement date. Currently, the Company does not have any leases classified as financing leases. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term.
The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company’s incremental borrowing rate is based on the FHLB advance rates, adjusted for the lease term and other factors.
Right-of-use assets and lease liabilities are included in other assets and accrued expenses and other liabilities, respectively, in the Consolidated Statements of Condition. The right-of-use assets as of December 31, 2025 and 2024 were $4,347 and $3,695, respectively. Lease liabilities as of December 31, 2025 and 2024 were $4,347 and $3,695, respectively.
Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2025 are as follows:
Years Ending December 31, | | | ||
2026 | $ | 947 | ||
2027 |
| 783 | ||
2028 |
| 552 | ||
2029 |
| 555 | ||
2030 |
| 485 | ||
Thereafter |
| 1,874 | ||
Total undiscounted lease payments | $ | 5,196 | ||
Discount | $ | 849 | ||
Total discounted lease payments | $ | 4,347 | ||
Operating lease weighted average remaining lease term (years) |
| 7.03 | years | |
Operating lease weighted average discount rate |
| 4.49 | % |
Rent expense for all operating leases was $1,275 in 2025 and $1,022 in 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 30, 2022 | |
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.