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LEASES

12 Months Ended

Dec. 31, 2024

NOTE N: LEASES

The Company has operating and finance leases for certain offices and certain equipment. These leases have remaining terms that range from less than one year to 15 years. Options to extend the leases range from a single extension option of one year to multiple extension options for up to 40 years. Certain agreements include an option to terminate the lease within one year.

The components of lease expense are as follows:


(000’s omitted)	2024		2023		2022
Operating lease cost	$	10,536	$	9,358	$	8,568
Finance lease cost:
Amortization of right-of-use assets		283		0		0
Interest on lease liabilities		215		0		0
Variable lease cost		80		68		108
Short-term lease cost ⁽¹⁾		99		64		65
Total lease cost	$	11,213	$	9,490	$	8,741

⁽¹⁾	Short-term lease cost includes the cost of leases with terms of twelve months or less, excluding leases with terms of one month or less.

Supplemental cash flow information related to leases is as follows:


(000’s omitted)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	8,756	$	8,584
Operating cash outflows for finance leases		86		0
Financing cash outflows for finance leases		71		0

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		16,043		19,301
Finance leases		8,608		0

Supplemental balance sheet information related to leases is as follows:


(000’s omitted, except lease term and discount rate)	2024			2023
Operating leases
Operating lease right-of-use assets	$	46,240		$	40,036
Operating lease liabilities		48,947			41,409

Finance leases
Finance lease right-of-use assets		8,325			0
Finance lease liabilities		8,667			0

Weighted average remaining lease term
Operating leases		7.4 years			6.5 years
Finance leases		14.4 years			0.0 years

Weighted average discount rate
Operating leases		4.23	%		3.79	%
Finance leases		5.01	%		0.00	%

Maturities of lease liabilities as of December 31, 2024 are as follows:


(000’s omitted)	Operating Leases		Finance Leases
2025	$	10,808	$	775
2026		9,520		782
2027		7,338		789
2028		5,892		796
2029		4,522		809
Thereafter		19,951		8,370
Total lease payments		58,031		12,321
Less imputed interest		(9,084)		(3,654)
Total	$	48,947	$	8,667

Maturities of lease liabilities as of December 31, 2023 are as follows:


(000’s omitted)	Operating Leases
2024	$	9,661
2025		8,590
2026		7,379
2027		5,264
2028		3,854
Thereafter		13,048
Total lease payments		47,796
Less imputed interest		(6,387)
Total	$	41,409

Included in the Company’s operating leases are related party leases where BPAS-APS and OneGroup, subsidiaries of the Company, lease office space from 706 North Clinton, LLC (“706 North Clinton”), an entity the Company holds a 50% membership interest in through its subsidiary OPFC II. As of December 31, 2024, the operating lease right-of-use assets and operating lease liabilities associated with these related party leases total $2.6 million and $2.7 million, respectively. As of December 31, 2023, the operating lease right-of-use assets and operating lease liabilities associated with these related party leases total $3.1 million and $3.2 million, respectively. As of December 31, 2024, the weighted average remaining lease term and weighted average discount rate for the Company’s related party leases are 5.2 years and 3.69%, respectively. As of December 31, 2023, the weighted average remaining lease term and weighted average discount rate for the Company’s related party leases are 6.1 years and 3.69%, respectively.

The maturities of the Company’s related party lease liabilities as of December 31, 2024 are as follows:


(000’s omitted)	706 North Clinton, LLC
2025	$	605
2026		615
2027		506
2028		506
2029		506
Thereafter		211
Total lease payments		2,949
Less imputed interest		(261)
Total	$	2,688

The maturities of the Company’s related party lease liabilities as of December 31, 2023 are as follows:


(000’s omitted)	706 North Clinton, LLC
2024	$	591
2025		605
2026		615
2027		506
2028		506
Thereafter		715
Total lease payments		3,538
Less imputed interest		(368)
Total	$	3,170

As of December 31, 2024, the Company has three additional operating leases for office space associated with new bank branches that are signed but have not yet commenced with lease terms of 10 years. The Company will be involved to varying degrees in the construction and design of the space and anticipates that the operating leases will commence during 2025. Upon commencement, lease right-of-use assets and lease liabilities of approximately $2.1 million will be recorded in the consolidated statements of condition.