XML 38 R15.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Leases | 12 Months Ended
--- | ---
Dec. 31, 2024
Leases [Abstract] |
Leases | Leases Lessor Arrangements Peoples began originating leases with the acquisition of leases from NSL and increased its portfolio with the acquisition of Vantage. The leases for NSL were determined to be sales-type leases, as the premise for the leases is dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. The leases for Vantage were determined to be primarily sales-type leases, as the payment structure and term triggered that accounting treatment, whereby either (i) the lease is structured as a fair market value buyout, whereby the lessee has the option to purchase the leased equipment at its fair market value at maturity of the lease, or (ii) the lessee purchases the leased equipment for one dollar at maturity of the lease. Originated leases are primarily classified as sales-type leases, and to a lesser extent, operating leases. These leases do not typically contain residual value guarantees; however, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee. As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs. Equipment leases relate to automotive, construction, healthcare, manufacturing, office, restaurant, information technology and other equipment. These leases include an estimated residual value, which is assessed for impairment as part of the allowance for credit losses. Operating leases are leases that do not meet the criteria of a sales-type lease or a finance lease. When Peoples originates an operating lease, it records an operating lease asset recognized in “Other assets” which is depreciated over its useful life. Operating leases assets are assessed for impairment consistent with Peoples’ fixed assets. Sales-type leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses. Peoples considers leases past due if any required payments have not been received as of the date such payments were required to be made under the terms of the lease agreement. Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses. Lease income noted in the table below includes (i) operating lease income, (ii) gains on the early termination of leases, net of any associated purchase accounting adjustments, (iii) month-to-month lease payments in excess of net investment in the lease, (iv) fees received for referrals, (v) gains and losses recognized on the sales of residual assets, and (vi) syndication income. Income on operating leases is recognized on a straight-line basis over the lease term. Additional information regarding Peoples’ sales-type leases can be found in “Note 4 Loans and Leases, and Allowance for Credit Losses.” The table below details Peoples’ lease income for the years ended December 31, 2024 and 2023:
(Dollars in thousands) | 2024 | 2023
Interest and fees on leases (a) | $ | 47,498 |  | $ | 42,931 |
Lease income | 10,408 |  | 7,844 |
Total lease income | $ | 57,906 |  | $ | 50,775 |
(a)Included in “Interest and fees on loans” on the Consolidated Statements of Income. For additional information, see “Note 4 Loans and Leases, and Allowance for Credit Losses.” The following table summarizes the net investments in sales-type leases, which are included in “Loans and leases, net of deferred costs” on the Consolidated Balance Sheets at December 31:
(Dollars in thousands) | 2024 | 2023
Lease payments receivable, at amortized cost | $ | 448,027 |  | $ | 461,760 |
Estimated residual values | 33,129 |  | 33,448 |
Initial direct costs | 7,148 |  | 7,114 |
Deferred revenue | (81,706) |  | (88,262) |
Total leases, at amortized cost | 406,598 |  | 414,060 |
Allowance for credit losses - leases | (12,893) |  | (10,850) |
Net investment in sales-type leases | $ | 393,705 |  | $ | 403,210 |
The following table summarizes the contractual maturities of leases:
(Dollars in thousands) | Balance
2025 | $ | 130,776 |
2026 | 93,937 |
2027 | 94,573 |
2028 | 67,639 |
2029 | 47,755 |
Thereafter | 13,347 |
Lease payments receivable, at amortized cost | $ | 448,027 |
Lessee Arrangements Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to 25 years. Certain leases may include options to extend or terminate the lease. Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability. Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability. At December 31, 2024, Peoples did not have any finance leases or any significant lessor agreements. Right of Use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term. Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs. Operating lease ROU assets exclude lease incentives and nonlease components. Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term. Peoples does not record ROU assets or lease liabilities for such leases. The table below details Peoples’ lease expense, which is included in “Net occupancy and equipment expense” in the Consolidated Statements of Income for the years ended December 31:
(Dollars in thousands) | 2024 | 2023
Operating lease expense | $ | 2,945 |  | $ | 3,030 |
Short-term lease expense | 1,173 |  | 268 |
Variable lease expense | 89 |  | — |
Total lease expense | $ | 4,207 |  | $ | 3,298 |
Peoples utilizes an incremental borrowing rate to determine the present value of lease payments for each lease, as the lease agreements do not provide an implicit rate. The estimated incremental borrowing rate reflects a secured rate and is based on the term of the lease and the interest rate environment at the lease commencement or remeasurement date. The following table details the ROU asset, the lease liability and other information related to Peoples’ operating leases on the Consolidated Balance Sheet at December 31:
(Dollars in thousands) | 2024 | 2023
ROU asset: |  |
Other assets | $ | 10,419 |  | $ | 11,689 |
Lease liability: |  |
Accrued expenses and other liabilities | $ | 10,968 |  | $ | 12,080 |
Other information: |  |
Weighted-average remaining lease term | 9.0 years | 9.5 years
Weighted-average discount rate | 4.11 | % | 3.34 | %
Cash paid during the year for operating leases | $ | 2,876 |  | $ | 2,990 |
Additions for ROU assets obtained during the year | $ | 1,660 |  | $ | 4,428 |
The following table summarizes the future lease payments of operating leases:
(Dollars in thousands) | Payments
2025 | $ | 2,420 |
2026 | 2,130 |
2027 | 1,896 |
2028 | 1,420 |
2029 | 962 |
Thereafter | 4,504 |
Total undiscounted lease payments | $ | 13,332 |
Imputed interest | (2,364) |
Total lease liability | $ | 10,968 |
Leases | Leases Lessor Arrangements Peoples began originating leases with the acquisition of leases from NSL and increased its portfolio with the acquisition of Vantage. The leases for NSL were determined to be sales-type leases, as the premise for the leases is dollar buy-out, whereby the lessee pays one dollar at maturity of the lease to purchase the equipment. The leases for Vantage were determined to be primarily sales-type leases, as the payment structure and term triggered that accounting treatment, whereby either (i) the lease is structured as a fair market value buyout, whereby the lessee has the option to purchase the leased equipment at its fair market value at maturity of the lease, or (ii) the lessee purchases the leased equipment for one dollar at maturity of the lease. Originated leases are primarily classified as sales-type leases, and to a lesser extent, operating leases. These leases do not typically contain residual value guarantees; however, Peoples reduces its residual asset risk by obtaining a security deposit from the lessee. As a lessor, Peoples originates commercial equipment leases either directly to the customer or indirectly through vendor programs. Equipment leases relate to automotive, construction, healthcare, manufacturing, office, restaurant, information technology and other equipment. These leases include an estimated residual value, which is assessed for impairment as part of the allowance for credit losses. Operating leases are leases that do not meet the criteria of a sales-type lease or a finance lease. When Peoples originates an operating lease, it records an operating lease asset recognized in “Other assets” which is depreciated over its useful life. Operating leases assets are assessed for impairment consistent with Peoples’ fixed assets. Sales-type leases originated by Peoples, that Peoples has the positive intent and ability to hold for the foreseeable future or to maturity or payoff, are reported at the net investment of the lease, net of initial direct costs, charge-offs and an allowance for credit losses. Peoples considers leases past due if any required payments have not been received as of the date such payments were required to be made under the terms of the lease agreement. Upon detection of the reduced ability of a lessee to meet cash flow obligations, leases are typically charged down to the net realizable value, with the residual balance placed on nonaccrual status. Leases deemed to be uncollectable are charged against the allowance for credit losses, while recoveries of previously charged-off amounts are credited to the allowance for credit losses. Lease income noted in the table below includes (i) operating lease income, (ii) gains on the early termination of leases, net of any associated purchase accounting adjustments, (iii) month-to-month lease payments in excess of net investment in the lease, (iv) fees received for referrals, (v) gains and losses recognized on the sales of residual assets, and (vi) syndication income. Income on operating leases is recognized on a straight-line basis over the lease term. Additional information regarding Peoples’ sales-type leases can be found in “Note 4 Loans and Leases, and Allowance for Credit Losses.” The table below details Peoples’ lease income for the years ended December 31, 2024 and 2023:
(Dollars in thousands) | 2024 | 2023
Interest and fees on leases (a) | $ | 47,498 |  | $ | 42,931 |
Lease income | 10,408 |  | 7,844 |
Total lease income | $ | 57,906 |  | $ | 50,775 |
(a)Included in “Interest and fees on loans” on the Consolidated Statements of Income. For additional information, see “Note 4 Loans and Leases, and Allowance for Credit Losses.” The following table summarizes the net investments in sales-type leases, which are included in “Loans and leases, net of deferred costs” on the Consolidated Balance Sheets at December 31:
(Dollars in thousands) | 2024 | 2023
Lease payments receivable, at amortized cost | $ | 448,027 |  | $ | 461,760 |
Estimated residual values | 33,129 |  | 33,448 |
Initial direct costs | 7,148 |  | 7,114 |
Deferred revenue | (81,706) |  | (88,262) |
Total leases, at amortized cost | 406,598 |  | 414,060 |
Allowance for credit losses - leases | (12,893) |  | (10,850) |
Net investment in sales-type leases | $ | 393,705 |  | $ | 403,210 |
The following table summarizes the contractual maturities of leases:
(Dollars in thousands) | Balance
2025 | $ | 130,776 |
2026 | 93,937 |
2027 | 94,573 |
2028 | 67,639 |
2029 | 47,755 |
Thereafter | 13,347 |
Lease payments receivable, at amortized cost | $ | 448,027 |
Lessee Arrangements Peoples leases certain banking facilities and equipment under various agreements with original terms providing for fixed monthly payments over periods generally ranging from two to 25 years. Certain leases may include options to extend or terminate the lease. Only those renewal and termination options which Peoples is reasonably certain of exercising are included in the calculation of the lease liability. Certain leases contain rent escalation clauses calling for rent increases over the term of the lease, which are included in the calculation of the lease liability. At December 31, 2024, Peoples did not have any finance leases or any significant lessor agreements. Right of Use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the remaining lease term. Operating lease ROU assets include lease payments made at or before the commencement date and initial indirect costs. Operating lease ROU assets exclude lease incentives and nonlease components. Short-term leases of certain facilities and equipment, with lease terms of 12 months or less, are recognized on a straight-line basis over the lease term. Peoples does not record ROU assets or lease liabilities for such leases. The table below details Peoples’ lease expense, which is included in “Net occupancy and equipment expense” in the Consolidated Statements of Income for the years ended December 31:
(Dollars in thousands) | 2024 | 2023
Operating lease expense | $ | 2,945 |  | $ | 3,030 |
Short-term lease expense | 1,173 |  | 268 |
Variable lease expense | 89 |  | — |
Total lease expense | $ | 4,207 |  | $ | 3,298 |
Peoples utilizes an incremental borrowing rate to determine the present value of lease payments for each lease, as the lease agreements do not provide an implicit rate. The estimated incremental borrowing rate reflects a secured rate and is based on the term of the lease and the interest rate environment at the lease commencement or remeasurement date. The following table details the ROU asset, the lease liability and other information related to Peoples’ operating leases on the Consolidated Balance Sheet at December 31:
(Dollars in thousands) | 2024 | 2023
ROU asset: |  |
Other assets | $ | 10,419 |  | $ | 11,689 |
Lease liability: |  |
Accrued expenses and other liabilities | $ | 10,968 |  | $ | 12,080 |
Other information: |  |
Weighted-average remaining lease term | 9.0 years | 9.5 years
Weighted-average discount rate | 4.11 | % | 3.34 | %
Cash paid during the year for operating leases | $ | 2,876 |  | $ | 2,990 |
Additions for ROU assets obtained during the year | $ | 1,660 |  | $ | 4,428 |
The following table summarizes the future lease payments of operating leases:
(Dollars in thousands) | Payments
2025 | $ | 2,420 |
2026 | 2,130 |
2027 | 1,896 |
2028 | 1,420 |
2029 | 962 |
Thereafter | 4,504 |
Total undiscounted lease payments | $ | 13,332 |
Imputed interest | (2,364) |
Total lease liability | $ | 10,968 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration