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OPERATING LEASES

3 Months Ended

Mar. 31, 2023

OPERATING LEASES - LESSORFirst Financial provides financing for various types of equipment through a variety of leasing arrangements. Operating leases are carried at cost less accumulated depreciation in the Consolidated Balance Sheets. Operating leases were $154.0 million and $91.7 million at March 31, 2023 and December 31, 2022, respectively, net of accumulated depreciation of $42.2 million and $35.0 million at March 31, 2023 and December 31, 2022, respectively. The Company recorded lease income of $10.2 million and $4.7 million related to lease payments for operating leases in leasing business revenue in the Consolidated Statement of Income for the three months ended March 31, 2023 and 2022, respectively. Depreciation expense related to operating lease equipment was $7.9 million and $3.9 million for the three months ended March 31, 2023 and 2022, respectively.

First Financial performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. First Financial recognized no impairment losses associated with operating lease assets for the three months ended March 31, 2023 or 2022. Recognized impairment losses, if any, would be recorded in Leasing business income in the Consolidated Statements of Income.

The future lease payments receivable from operating leases as of March 31, 2023 are as follows:



(Dollars in thousands)	Undiscounted cash flows
2023 (remaining nine months)	$	26,638
2024	30,263
2025	21,311
2026	13,299
2027	5,297
Thereafter	2,009
Total operating lease payments	$	98,817