PEOPLES BANCORP INCPEBO
PEOPLES BANCORP INC Leases Disclosure
Leases
Lessor Arrangements
Peoples began originating leases with the acquisition of leases from NSL and increased its portfolio with the acquisition of Vantage. The leases for NSL are generally classified as sales-type leases, as the leases are structured with a dollar buyout, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. The leases for Vantage are generally classified as sales-type leases, as the payment structure and term triggered that accounting treatment, whereby either (i) the lease is structured as a fair market value buyout, whereby the lessee has the option to purchase the leased equipment at its fair market value at maturity of the lease, or (ii) the lessee purchases the leased equipment for one dollar at maturity of the lease. Vantage also originates operating leases, which are generally structured over a shorter term and do not meet the criteria of a sales-type lease. These leases do not typically contain residual value guarantees; however, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee. As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs. Equipment leases relate to healthcare, manufacturing, office, restaurant, information technology, general warehousing, storage equipment, vocational trucks and trailers, and other equipment. Leases structured with a fair market value buyout include an estimated residual value, which is assessed for impairment as part of the allowance for credit losses. Certain leases contain renewal options, which are not included in the lease term or lease receivable, as they are not considered by Peoples to be reasonable certain as they are at the discretion of the lessee. When Peoples originates an operating lease, it records an operating lease asset recognized in “Other assets” which is depreciated over its useful life. Operating leases assets are assessed for impairment consistent with Peoples’ fixed assets.
Sales-type leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses. Peoples considers leases past due if any required payments have not been received as of the date such payments were required to be made under the terms of the lease agreement. Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses.
Lease income noted in the table below includes (i) operating lease income, (ii) month-to-month lease payments in excess of net investment in the lease, (iii) gains on the early termination of leases, net of any associated purchase accounting adjustments, (iv) fees received for referrals, (v) gains and losses recognized on the sales of residual assets, and (vi) syndication income. Income on operating leases is recognized on a straight-line basis over the lease term. Additional information regarding Peoples’ sales-type leases can be found in “Note 4 Loans and Leases, and Allowance for Credit Losses.”
The table below details Peoples’ lease income for the years ended December 31, 2025, and 2024:
| (Dollars in thousands) | 2025 | 2024 | ||||||
| Interest and fees on leases (a) | $ | 39,668 | $ | 47,498 | ||||
| Lease income | 15,612 | 10,480 | ||||||
| $ | 55,280 | $ | 57,978 | |||||
(a) Included in “Interest and fees on loans” on the Consolidated Statements of Income. For additional information, see “Note 4 Loans and Leases, and Allowance for Credit Losses.”
The following table summarizes the net investments in sales-type leases, which are included in “Loans and leases, net of deferred costs” on the Consolidated Balance Sheets at December 31:
| (Dollars in thousands) | 2025 | 2024 | ||||||
| Lease payments receivable, at amortized cost | $ | 393,089 | $ | 448,027 | ||||
| Estimated residual values | 33,125 | 33,129 | ||||||
| Initial direct costs | 5,535 | 7,148 | ||||||
| Deferred revenue | (66,100) | (81,706) | ||||||
| Total leases, at amortized cost | 365,649 | 406,598 | ||||||
| Allowance for credit losses - leases | (16,475) | (12,893) | ||||||
| Net investment in sales-type leases | $ | 349,174 | $ | 393,705 | ||||
The following table summarizes the contractual maturities of leases:
| (Dollars in thousands) | Balance | ||||
| 2026 | $ | 100,104 | |||
| 2027 | 75,704 | ||||
| 2028 | 91,153 | ||||
| 2029 | 58,651 | ||||
| 2030 | 51,060 | ||||
| Thereafter | 16,417 | ||||
| Lease payments receivable, at amortized cost | $ | 393,089 | |||
Lessee Arrangements
Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from to 30 years. Certain leases may include options to extend or terminate the lease. Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability. Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability. At December 31, 2025, Peoples did not have any finance leases or any significant sublessor agreements. Right of Use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term. Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs. Operating lease ROU assets exclude nonlease components. Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term. Peoples does not record ROU assets or lease liabilities for such leases.
The table below details Peoples’ lease expense, which is included in “Net occupancy and equipment expense” in the Consolidated Statements of Income for the years ended December 31:
| (Dollars in thousands) | 2025 | 2024 | ||||||
| Operating lease expense | $ | 2,595 | $ | 2,945 | ||||
| Short-term lease expense | 1,479 | 1,173 | ||||||
| Variable lease expense | 39 | 89 | ||||||
| Total lease expense | $ | 4,113 | $ | 4,207 | ||||
Lease payments are discounted using Peoples’ incremental borrowing rate, consistent with what Peoples would pay to borrow on a collateralized basis over a term similar to each lease.
The following table details the ROU asset, the lease liability and other information related to Peoples’ operating leases on the Consolidated Balance Sheets at December 31:
| (Dollars in thousands) | 2025 | 2024 | ||||||
| ROU asset: | ||||||||
| $ | 9,340 | $ | 10,419 | |||||
| Lease liability: | ||||||||
| $ | 9,912 | $ | 10,968 | |||||
| Other information: | ||||||||
| Weighted-average remaining lease term | 8.7 years | 9.0 years | ||||||
| Weighted-average discount rate | 4.16 | % | 4.11 | % | ||||
| Cash paid during the year for operating leases | $ | 2,552 | $ | 2,876 | ||||
| Additions for ROU assets obtained during the year | $ | 1,333 | $ | 1,660 | ||||
The following table summarizes the future lease payments of operating leases:
| (Dollars in thousands) | Payments | ||||
2026 | $ | 2,413 | |||
2027 | 2,146 | ||||
2028 | 1,625 | ||||
2029 | 1,173 | ||||
2030 | 671 | ||||
| Thereafter | 3,937 | ||||
| Total undiscounted lease payments | $ | 11,965 | |||
| Imputed interest | (2,053) | ||||
| Total lease liability | $ | 9,912 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Mar 15, 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.