Leases
The Company has operating leases on several of its banking centers and office facilities. These operating leases contain renewal options for periods ranging from one to five years that expire at various dates through October 31, 2033, with no residual value guarantees. Lease expenses are included as a component of occupancy and equipment expenses within the accompanying consolidated statements of income.
The table below summarizes the components of total lease expense for the years ended December 31, 2025, 2024, and 2023:
| | | | | | | | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 | | 2023 |
| Amortization of right-of-use assets | $ | 496 | | | $ | 581 | | | $ | 643 | |
| Other operating leases | 221 | | 113 | | 72 |
| Non-lease components | 31 | | 28 | | 8 |
| Total Lease Expense | $ | 748 | | | $ | 722 | | | $ | 723 | |
Cash paid for amounts included in the measurement of lease liabilities totaled $505,000, $571,000, and $625,000 for the years ended December 31, 2025, 2024, and 2023, respectively.
The table below summarizes other information related to the Company’s measurement of lease liabilities as of December 31, 2025 and 2024:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Weighted average remaining operating lease term | 4.77 years | | 5.51 years |
| Weighted average operating lease discount rate | 3.3 | % | | 3.3 | % |
Future obligations over the primary and renewal option terms of the Company’s lease liabilities as of December 31, 2025, were as follows:
| | | | | | | | |
| Years Ending December 31, | | Amount |
| (in thousands) | | |
| 2026 | | $ | 321 | |
| 2027 | | 264 | |
| 2028 | | 267 | |
| 2029 | | 269 | |
| 2030 | | 271 | |
| Thereafter | | 352 | |
| Total lease payments | | 1,744 | |
| Less: Imputed interest | | (200) | |
| Present value of lease liabilities | | $ | 1,544 | |
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.