Leases

12 Months Ended

Dec. 31, 2024

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, 2024 were $15.7 million and $16.5 million, respectively. At December 31, 2023, the carrying amounts of Park's ROU assets and lease liability were $15.7 million and $16.6 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, 2024, 2023 and 2022 follows:


(In thousands)	Year ended December 31, 2024		Year ended December 31, 2023		Year ended December 31, 2022
Lease cost
Operating lease cost	$	2,511	$	2,874	$	3,073
Sublease income	(10)		(273)		(252)
Total lease cost	$	2,501	$	2,601	$	2,821

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,530	$	3,630	$	3,116
ROU assets obtained in exchange for new operating lease liabilities	$	2,718	$	545	$	7,867
Reductions to ROU assets resulting from reductions to lease obligations	$	(1,970)	$	(3,062)	$	(2,812)

Park's operating leases had a weighted average remaining term of 9.8 years and 10.1 years at December 31, 2024 and 2023, respectively. The weighted average discount rate of Park's operating leases was 3.8% and 3.5% at December 31, 2024 and 2023, respectively.

Undiscounted cash flows included in lease liabilities at December 31, 2024 have expected contractual payments as follows:


(In thousands)	December 31, 2024
2025 (1)	$	1,882
2026	2,422
2027	2,325
2028	2,278
2029	2,281
Thereafter	9,334
Total undiscounted minimum lease payments	$	20,522
Less: imputed interest	(4,017)
Total lease liabilities	$	16,505

(1) Includes a tenant improvement allowance of $524,000 related to the reimbursement of leasehold expenditures.