Leases

3 Months Ended

Mar. 31, 2025

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 ROU asset" and "Operating lease liability," respectively, on Park's Consolidated Condensed Balance Sheets. The carrying amounts of Park's ROU asset and lease liability at March 31, 2025 were $16.3 million and $17.7 million, respectively. At December 31, 2024, the carrying amounts of Park's ROU asset and lease liability were $15.7 million and $16.5 million, respectively. Park's operating lease expense is recorded in "Occupancy expense" on the Company's Consolidated Condensed Statements of Income.

Other information related to operating leases for the three-month periods ended March 31, 2025 and 2024 follows:


	Three Months Ended
(in thousands)	March 31, 2025		March 31, 2024
Lease cost
Operating lease cost	$	640	$	622
Sublease income	—		(10)
Total lease cost	$	640	$	612

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	73	$	794
ROU assets obtained in exchange for new operating lease liabilities	$	1,069	$	547
Reductions to ROU assets resulting from reductions to lease obligations	$	(437)	$	(658)

(1) Includes a tenant improvement allowance of $524,000 related to the reimbursement of leasehold expenditures for the three-month period ended March 31, 2025.

Park's operating leases had a weighted average remaining term of 9.8 years at both March 31, 2025 and December 31, 2024. The weighted average discount rate of Park's operating leases was 4.0% and 3.8% at March 31, 2025 and at December 31, 2024, respectively.

Undiscounted cash flows included in lease liabilities have expected contractual payments as follows:


(in thousands)	March 31, 2025
Nine months ending December 31, 2025	$	1,871
2026	2,502
2027	2,411
2028	2,370
2029	2,379
Thereafter	10,343
Total undiscounted minimum lease payments	$	21,876
Present value adjustment	(4,216)
Total lease liabilities	$	17,660