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Note 5 - Premises and Equipment

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Premises and Equipment

Note 5. Premises and Equipment

The following summarizes the components of premises and equipment as of December 31, 2024 and 2023:


		2024			2023

		(dollars in thousands)

Land		$	27,096		$	17,807
Buildings (useful lives 15 to 39 years)			116,895			110,271
Construction in process - buildings			28,535			7,773
Furniture and equipment (useful lives 3 to 15 years)			58,094			52,350
Premises and equipment			230,620			188,201
Less accumulated depreciation			71,467			64,924
Premises and equipment, net		$	159,153		$	123,277

Construction in process – buildings consists of renovation costs on existing branch facilities as well as construction costs on new branch facilities.

The Company entered into a construction contract in 2024 for the construction of a new CSB facility in Ankeny, Iowa. The Company will pay the contractor a contract price of approximately $41.3 million, subject to certain agreed upon additions and deductions. As of December 31, 2024, the Company had paid $8.7 million of the contract price, resulting in a remaining future commitment of $32.6 million. Construction is anticipated to be completed in 2026.

The Company entered into a construction contract in 2023 for the construction of a new CRBT facility in Cedar Rapids, Iowa. The Company will pay the contractor a contract price of approximately $17.0 million, subject to additions and deductions as provided in the contract documents. As of December 31, 2024, the Company had paid $15.8 million of the contract price, resulting in a remaining future commitment of $1.2 million. Construction is anticipated to be completed in March 2025.

As a lessee, the Company has entered into operating leases for certain branch locations. Total lease expenses were $406 thousand and $469 thousand for the year ended December 31, 2024 and 2023, respectively.

At December 31, 2024 and 2023, the Company’s ROU assets (included in other assets on the consolidated balance sheets) and operating lease liabilities (included in other liabilities on the consolidated balance sheets) were both $3.3

Note 5. Premises and Equipment (continued)

million and $3.5 million, respectively. During the year ended December 31, 2023, the Company increased its ROU assets by $1.1 million with a new operating lease for m2’s office relocation.

At December 31, 2024, the contractual maturities of operating lease liabilities were as follows:


		Amount
Year ending December 31:		(dollars in thousands)
2025		$	461
2026			434
2027			427
2028			429
2029			305
Thereafter			2,185
		$	4,241

As a lessor, the Company leases certain types of commercial vehicles and industrial equipment to its customers. The Company recognized lease-related revenue, primarily interest income from direct financing leases, of $1.4 million and $2.0 million for the years ended December 31, 2024 and 2023, respectively. At December 31, 2024 and 2023, the Company’s net investment in direct financing leases was $16.5 million and $30.2 million, respectively.

As of December 31, 2024, the contractual maturities of sales-type and direct financing lease receivables were as follows:


		Amount
Year ending December 31:		(dollars in thousands)
2025		$	2,087
2026			3,184
2027			4,828
2028			7,247
2029			1,160
Thereafter			—
Total lease payments receivable		$	18,506
Unguaranteed residual values			165
Unearned lease/residual income			(1,595)
		$	17,076
Plus deferred origination costs, net of fees			18
		$	17,094
Less allowance			(580)
Total lease payments receivable		$	16,514

The