PARK NATIONAL CORP /OH/PRK

PARK NATIONAL CORP /OH/ Leases Disclosure

10-KFiled Feb 23, 20262 min read
Leases
Park is a lessee in several noncancellable operating lease arrangements, primarily for retail branches, administrative and warehouse buildings, ATMs, and certain office equipment within its Ohio, North Carolina, South Carolina, and Kentucky markets. Certain of these leases contain renewal options for periods ranging from one year to five years. Park’s leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease arrangements include fixed payments plus, for many of Park’s real estate leases, variable payments such as Park's proportionate share of property taxes, insurance and common area maintenance.
Park's operating lease ROU asset and lease liability are presented in “Operating lease right-of-use asset" and "Operating lease liability," respectively, on Park's Consolidated Balance Sheets. The carrying amounts of Park's ROU asset and lease liability at December 31, 2025 were $15.7 million and $17.1 million, respectively. At December 31, 2024, the carrying amounts of Park's ROU assets and lease liability were $15.7 million and $16.5 million, respectively. Park's operating lease expense is recorded in "Occupancy expense" on the Company's Consolidated Statements of Income.

Other information related to operating leases for the years ended December 31, 2025, 2024 and 2023 follows:

(In thousands)Year ended December 31, 2025Year ended December 31, 2024Year ended December 31, 2023
Lease cost
Operating lease cost$2,626 $2,511 $2,874 
Sublease income— (10)(273)
Total lease cost$2,626 $2,501 $2,601 
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)
$1,973 $2,530 $3,630 
ROU assets obtained in exchange for new operating lease liabilities$1,853 $2,718 $545 
Reductions to ROU assets resulting from reductions to lease obligations$(1,819)$(1,970)$(3,062)
(1) Includes a tenant improvement allowance of $524,000 related to the reimbursement of leasehold expenditures for the year ended December 31, 2025.

Park's operating leases had a weighted average remaining term of 9.3 years and 9.8 years at December 31, 2025 and 2024, respectively. The weighted average discount rate of Park's operating leases was 4.4% and 3.8% at December 31, 2025 and 2024, respectively.
Undiscounted cash flows included in lease liabilities at December 31, 2025 have expected contractual payments as follows:

(In thousands)December 31, 2025
2026$2,621 
20272,546 
20282,514 
20292,532 
20301,750 
Thereafter9,116 
Total undiscounted minimum lease payments$21,079 
Less: imputed interest(4,016)
Total lease liabilities$17,063 

Historical Timeline

Fiscal YearFiled
2025Feb 23, 2026Showing above
2024Feb 24, 2025
2023Feb 23, 2024
2022Mar 1, 2023
2021Feb 24, 2022
2020Feb 26, 2021
2019Feb 28, 2020

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.

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