SOUTHERN FIRST BANCSHARES INC Leases Disclosure
NOTE 6 – Leases
The Company had operating right-of-use (“ROU”) assets, included in property and equipment, of $19.0 million and $20.6 million as of December 31, 2025 and 2024, respectively. The Company had lease liabilities, included in other liabilities, of $21.7 million and $23.2 million as of December 31, 2025 and 2024, respectively. We maintain operating leases on land and buildings for various office spaces. The lease agreements have maturity dates ranging from January 2028 to February 2032, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 4.31 years and 4.95 years as of December 31, 2025 and 2024, respectively. The ROU asset and lease liability are recognized at lease commencement by calculating the present value of lease payments over the lease term. The ROU assets also include any initial direct costs incurred and lease payments made at or before commencement date and are reduced by any lease incentives.
The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term at implementation of the accounting standard and as of the lease commencement date for leases subsequently entered into. The weighted average discount rate for leases was 2.27% and 2.28% as of December 31, 2025 and 2024, respectively.
Total operating lease costs were $2.5 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively.
Operating lease payments due as of December 31, 2025 were as follows:
| Operating | ||||
| (dollars in thousands) | Leases | |||
| 2026 | $ | 2,210 | ||
| 2027 | 2,267 | |||
| 2028 | 2,015 | |||
| 2029 | 1,501 | |||
| 2030 | 1,522 | |||
| Thereafter | 17,164 | |||
| Total undiscounted lease payments | 26,679 | |||
| Discount effect of cash flows | 4,969 | |||
| Total lease liability | $ | 21,710 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Feb 13, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Mar 2, 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.