Leases

3 Months Ended

Mar. 31, 2025

14. Leases

The Company leases land and office facilities under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2039 and do not include renewal options based on economic factors that would have implied that continuation of the lease was reasonably certain. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally include real estate taxes and common area maintenance charges in the rental payments. Short-term leases are leases having a term of twelve months or less. The Company does not separate nonlease components from the associated lease component of our operating leases. As a result, the Company accounts for these components as a single component since (i) the timing and pattern of transfer of the nonlease components and the associated lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company recognizes short term leases on a straight-line basis and does not record a related right-of-use ("ROU") asset and liability for such leases. In addition, equipment leases were determined to be immaterial and a related ROU asset and liability for such leases is not recorded.

As of March 31, 2025, the balances of the ROU asset and lease liability were $43.7 million and $46.5 million, respectively. As of December 31, 2024, the balances of the ROU asset and lease liability were $42.3 million and $45.2 million, respectively. The ROU asset is included in bank premises and equipment, net, and the lease liability is included in accrued interest payable and other liabilities.

The minimum rental commitments under these noncancelable operating leases are as follows (in thousands) as of March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
2025	$	8,018	$	10,262
2026	10,266		9,663
2027	8,921		8,341
2028	7,053		6,464
2029	6,279		5,675
Thereafter	17,752		16,346
Total future minimum lease payments	$	58,289	$	56,751
Discount effect of cash flows	(11,802)		(11,560)
Present value of net future minimum lease payments	$	46,487	$	45,191

Additional information (dollar amounts in thousands):


	Three Months Ended
Lease expense:	March 31, 2025			March 31, 2024
Operating lease expense	$	2,307		$	2,598

Variable lease expense	270			296
Total lease expense	$	2,577		$	2,894
Other information:
Cash paid for amounts included in the measurement of lease liabilities	$	2,001		$	2,710
Weighted-average remaining lease term (in years)	7.30			7.88
Weighted-average discount rate	3.62		%	3.42		%

The Company currently leases two properties from two related parties. Total rent expense from the leases was $20,000, or 0.77% of total lease expense for the three months ended March 31, 2025.