Trustmark leases certain types of machinery and equipment to its customers through sales-type and direct financing leases as part of its equipment financing portfolio. These leases generally have remaining lease terms of one to nine years, some of which include renewal options and/or options for the lessee to purchase the leased property near or at the end of the lease term. Trustmark recognized interest income from its sales-type and direct financing leases of $18.2 million, $12.7 million and $3.2 million for the years ended December 31, 2025, 2024 and 2023 respectively. Trustmark does not have any significant operating leases in which it is the lessor.

The table below summarizes the components of Trustmark's net investment in its sales-type and direct financing leases at December 31, 2025 and 2024 ($ in thousands):


	December 31,
	2025			2024
Leases receivable	$	442,096		$	282,771
Unearned income		(68,283	)		(45,585	)
Initial direct costs		3,236			2,252
Unguaranteed lease residual		24,360			7,084
Total net investment	$	401,409		$	246,522

The table below details the minimum future lease payments for Trustmark's leases receivable at December 31, 2025 ($ in thousands):


	December 31, 2025
2026	$	83,017
2027		96,450
2028		86,063
2029		70,379
2030		46,492
Thereafter		59,695
Total leases receivable	$	442,096

For Trustmark's lessee arrangements, the leases of FBBI are included in discontinued operations, and as a result, have been excluded from the amounts below. The following table details the components of net lease cost for the periods presented ($ in thousands):


	Years Ended December 31,
	2025			2024			2023
Finance leases
Amortization of right-of-use assets	$	452		$	452		$	786
Interest on lease liabilities		132			148			163
Operating lease cost		5,370			5,075			4,787
Short-term lease cost		647			230			229
Variable lease cost		906			841			840
Sublease income		(270	)		(122	)		(12	)
Net lease cost	$	7,237		$	6,624		$	6,793

The following table details the cash payments included in the measurement of lease liabilities during the periods presented ($ in thousands):


	Years Ended December 31,
	2025		2024		2023
Finance leases
Operating cash flows included in operating activities	$	132	$	148	$	163
Financing cash flows included in payments under finance lease obligations		452		424		721
Operating leases
Operating cash flows (fixed payments) included in other operating activities, net		5,302		4,848		3,666
Operating cash flows (liability reduction) included in other operating activities, net		3,897		3,473		3,204

The following table details balance sheet information, as well as weighted-average lease terms and discount rates, related to leases at December 31, 2025 and 2024 ($ in thousands):


	December 31,
	2025			2024
Finance lease right-of-use assets, net of accumulated depreciation	$	2,847		$	3,299
Finance lease liabilities		3,458			3,910
Operating lease right-of-use assets		32,152			34,668
Operating lease liabilities		36,250			38,698

Weighted-average lease term
Finance leases	6.36 years			7.35 years
Operating leases	8.69 years			9.31 years

Weighted-average discount rate
Finance leases		3.61	%		3.61	%
Operating leases		4.04	%		3.72	%

At December 31, 2025, future minimum rental commitments under finance and operating leases were as follows ($ in thousands):


	Finance Leases			Operating Leases
2026	$	589		$	5,282
2027		594			5,234
2028		599			4,993
2029		633			4,829
2030		644			4,808
Thereafter		810			18,523
Total minimum lease payments		3,869			43,669
Less imputed interest		(411	)		(7,419	)
Lease liabilities	$	3,458		$	36,250