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Leases | 3 Months Ended
--- | ---
Mar. 31, 2024
Leases [Abstract] |
Leases | Leases As Lessee - Operating Leases The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on the Company's Consolidated Balance Sheet. The Company recognizes lease expenses for these leases over the lease term. The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
| March 31, 2024 |  | December 31, 2023
Supplemental balance sheet information |  |  |
ROU assets | $ | 8,967 |  |  | $ | 9,259 |
Lease liabilities | $ | 10,625 |  |  | $ | 10,975 |
Weighted-average remaining lease terms (years) | 8.6 |  | 8.8
Weighted-average discount rate | 3.43 | % |  | 3.41 | %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024 | $ | 1,392 |
2025 | 1,712 |
2026 | 1,703 |
2027 | 1,727 |
2028 | 1,535 |
Thereafter | 4,370 |
Total undiscounted minimum lease payments | 12,439 |
Less: amount representing interest | (1,814) |
Total lease liability | $ | 10,625 |
The following table presents components of operating lease expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease cost (included in occupancy expense, net) | $ | 406 |  |  | $ | 394 |  |  |  |  |
Variable lease cost (included in occupancy expense, net) | 1 |  |  | 3 |  |  |  |  |
Sublease income (included in other noninterest income) | (42) |  |  | (42) |  |  |  |  |
Total operating lease expense, net | $ | 365 |  |  | $ | 355 |  |  |  |  |
As Lessee - Finance Lease During the quarter ended March 31, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $1,249, terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $15 for the three months ended March 31, 2023. Supplemental lease cash flow information for the periods indicated:
| Three Months Ended March 31,
| 2024 |  | 2023
ROU assets - noncash additions (operating leases) | $ | 24 |  |  | $ | — |
Cash paid for amounts included in the measurement of lease liabilities (operating leases) | 378 |  |  | 363 |
Cash paid for amounts included in the measurement of lease liabilities (finance leases) | — |  |  | 22 |
As Lessor - General The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option, and most of the leases that do not have a purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease. As Lessor - Operating Leases Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to seven years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $29,713 and $30,121 with a residual value of $13,917 and $14,958 as of March 31, 2024 and December 31, 2023, respectively. The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease income | $ | 1,859 |  |  | $ | 1,505 |  |  |  |  |
Depreciation expense | 1,643 |  |  | 1,266 |  |  |  |  |
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024 | $ | 5,546 |
2025 | 6,042 |
2026 | 4,120 |
2027 | 1,529 |
2028 | 1,253 |
Thereafter | 2,373 |
Total of future minimum payments | $ | 20,863 |
As Lessor - Financing Leases Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended March 31, 2024 and 2023, interest income on equipment finance leases totaled $1,055 and $860, respectively. The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $69,442 and $70,150 at March 31, 2024 and December 31, 2023, respectively. The following schedule summarizes, as of March 31, 2024, aggregate future minimum finance lease payments to be received:
Remainder of 2024 | $ | 19,700 |
2025 | 20,943 |
2026 | 16,821 |
2027 | 12,171 |
2028 | 5,847 |
Thereafter | 4,503 |
Total undiscounted minimum lease payments | 79,985 |
Less: amount representing interest | (10,543) |
Total lease receivable | $ | 69,442 |
Leases | Leases As Lessee - Operating Leases The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on the Company's Consolidated Balance Sheet. The Company recognizes lease expenses for these leases over the lease term. The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
| March 31, 2024 |  | December 31, 2023
Supplemental balance sheet information |  |  |
ROU assets | $ | 8,967 |  |  | $ | 9,259 |
Lease liabilities | $ | 10,625 |  |  | $ | 10,975 |
Weighted-average remaining lease terms (years) | 8.6 |  | 8.8
Weighted-average discount rate | 3.43 | % |  | 3.41 | %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024 | $ | 1,392 |
2025 | 1,712 |
2026 | 1,703 |
2027 | 1,727 |
2028 | 1,535 |
Thereafter | 4,370 |
Total undiscounted minimum lease payments | 12,439 |
Less: amount representing interest | (1,814) |
Total lease liability | $ | 10,625 |
The following table presents components of operating lease expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease cost (included in occupancy expense, net) | $ | 406 |  |  | $ | 394 |  |  |  |  |
Variable lease cost (included in occupancy expense, net) | 1 |  |  | 3 |  |  |  |  |
Sublease income (included in other noninterest income) | (42) |  |  | (42) |  |  |  |  |
Total operating lease expense, net | $ | 365 |  |  | $ | 355 |  |  |  |  |
As Lessee - Finance Lease During the quarter ended March 31, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $1,249, terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $15 for the three months ended March 31, 2023. Supplemental lease cash flow information for the periods indicated:
| Three Months Ended March 31,
| 2024 |  | 2023
ROU assets - noncash additions (operating leases) | $ | 24 |  |  | $ | — |
Cash paid for amounts included in the measurement of lease liabilities (operating leases) | 378 |  |  | 363 |
Cash paid for amounts included in the measurement of lease liabilities (finance leases) | — |  |  | 22 |
As Lessor - General The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option, and most of the leases that do not have a purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease. As Lessor - Operating Leases Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to seven years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $29,713 and $30,121 with a residual value of $13,917 and $14,958 as of March 31, 2024 and December 31, 2023, respectively. The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease income | $ | 1,859 |  |  | $ | 1,505 |  |  |  |  |
Depreciation expense | 1,643 |  |  | 1,266 |  |  |  |  |
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024 | $ | 5,546 |
2025 | 6,042 |
2026 | 4,120 |
2027 | 1,529 |
2028 | 1,253 |
Thereafter | 2,373 |
Total of future minimum payments | $ | 20,863 |
As Lessor - Financing Leases Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended March 31, 2024 and 2023, interest income on equipment finance leases totaled $1,055 and $860, respectively. The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $69,442 and $70,150 at March 31, 2024 and December 31, 2023, respectively. The following schedule summarizes, as of March 31, 2024, aggregate future minimum finance lease payments to be received:
Remainder of 2024 | $ | 19,700 |
2025 | 20,943 |
2026 | 16,821 |
2027 | 12,171 |
2028 | 5,847 |
Thereafter | 4,503 |
Total undiscounted minimum lease payments | 79,985 |
Less: amount representing interest | (10,543) |
Total lease receivable | $ | 69,442 |
Leases | Leases As Lessee - Operating Leases The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on the Company's Consolidated Balance Sheet. The Company recognizes lease expenses for these leases over the lease term. The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
| March 31, 2024 |  | December 31, 2023
Supplemental balance sheet information |  |  |
ROU assets | $ | 8,967 |  |  | $ | 9,259 |
Lease liabilities | $ | 10,625 |  |  | $ | 10,975 |
Weighted-average remaining lease terms (years) | 8.6 |  | 8.8
Weighted-average discount rate | 3.43 | % |  | 3.41 | %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024 | $ | 1,392 |
2025 | 1,712 |
2026 | 1,703 |
2027 | 1,727 |
2028 | 1,535 |
Thereafter | 4,370 |
Total undiscounted minimum lease payments | 12,439 |
Less: amount representing interest | (1,814) |
Total lease liability | $ | 10,625 |
The following table presents components of operating lease expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease cost (included in occupancy expense, net) | $ | 406 |  |  | $ | 394 |  |  |  |  |
Variable lease cost (included in occupancy expense, net) | 1 |  |  | 3 |  |  |  |  |
Sublease income (included in other noninterest income) | (42) |  |  | (42) |  |  |  |  |
Total operating lease expense, net | $ | 365 |  |  | $ | 355 |  |  |  |  |
As Lessee - Finance Lease During the quarter ended March 31, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $1,249, terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $15 for the three months ended March 31, 2023. Supplemental lease cash flow information for the periods indicated:
| Three Months Ended March 31,
| 2024 |  | 2023
ROU assets - noncash additions (operating leases) | $ | 24 |  |  | $ | — |
Cash paid for amounts included in the measurement of lease liabilities (operating leases) | 378 |  |  | 363 |
Cash paid for amounts included in the measurement of lease liabilities (finance leases) | — |  |  | 22 |
As Lessor - General The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option, and most of the leases that do not have a purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease. As Lessor - Operating Leases Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to seven years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $29,713 and $30,121 with a residual value of $13,917 and $14,958 as of March 31, 2024 and December 31, 2023, respectively. The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease income | $ | 1,859 |  |  | $ | 1,505 |  |  |  |  |
Depreciation expense | 1,643 |  |  | 1,266 |  |  |  |  |
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024 | $ | 5,546 |
2025 | 6,042 |
2026 | 4,120 |
2027 | 1,529 |
2028 | 1,253 |
Thereafter | 2,373 |
Total of future minimum payments | $ | 20,863 |
As Lessor - Financing Leases Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended March 31, 2024 and 2023, interest income on equipment finance leases totaled $1,055 and $860, respectively. The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $69,442 and $70,150 at March 31, 2024 and December 31, 2023, respectively. The following schedule summarizes, as of March 31, 2024, aggregate future minimum finance lease payments to be received:
Remainder of 2024 | $ | 19,700 |
2025 | 20,943 |
2026 | 16,821 |
2027 | 12,171 |
2028 | 5,847 |
Thereafter | 4,503 |
Total undiscounted minimum lease payments | 79,985 |
Less: amount representing interest | (10,543) |
Total lease receivable | $ | 69,442 |
Leases | Leases As Lessee - Operating Leases The Company's operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at management's sole discretion. When it is reasonably certain that the Company will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company's lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on the Company's Consolidated Balance Sheet. The Company recognizes lease expenses for these leases over the lease term. The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.
| March 31, 2024 |  | December 31, 2023
Supplemental balance sheet information |  |  |
ROU assets | $ | 8,967 |  |  | $ | 9,259 |
Lease liabilities | $ | 10,625 |  |  | $ | 10,975 |
Weighted-average remaining lease terms (years) | 8.6 |  | 8.8
Weighted-average discount rate | 3.43 | % |  | 3.41 | %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024 | $ | 1,392 |
2025 | 1,712 |
2026 | 1,703 |
2027 | 1,727 |
2028 | 1,535 |
Thereafter | 4,370 |
Total undiscounted minimum lease payments | 12,439 |
Less: amount representing interest | (1,814) |
Total lease liability | $ | 10,625 |
The following table presents components of operating lease expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease cost (included in occupancy expense, net) | $ | 406 |  |  | $ | 394 |  |  |  |  |
Variable lease cost (included in occupancy expense, net) | 1 |  |  | 3 |  |  |  |  |
Sublease income (included in other noninterest income) | (42) |  |  | (42) |  |  |  |  |
Total operating lease expense, net | $ | 365 |  |  | $ | 355 |  |  |  |  |
As Lessee - Finance Lease During the quarter ended March 31, 2023, the Company purchased the property associated with the finance lease reported historically. The Company purchased the property for $1,249, terminating the existing land lease. Prior to the purchase, interest expense on the lease liability totaled $15 for the three months ended March 31, 2023. Supplemental lease cash flow information for the periods indicated:
| Three Months Ended March 31,
| 2024 |  | 2023
ROU assets - noncash additions (operating leases) | $ | 24 |  |  | $ | — |
Cash paid for amounts included in the measurement of lease liabilities (operating leases) | 378 |  |  | 363 |
Cash paid for amounts included in the measurement of lease liabilities (finance leases) | — |  |  | 22 |
As Lessor - General The Company leases equipment to commercial end users under operating and finance lease arrangements. The Company's equipment finance leases consist mainly of construction, transportation, healthcare and manufacturing equipment. Many of its operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a fixed purchase option, and most of the leases that do not have a purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. The Company's leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease. As Lessor - Operating Leases Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from one to seven years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $29,713 and $30,121 with a residual value of $13,917 and $14,958 as of March 31, 2024 and December 31, 2023, respectively. The following table presents total equipment finance operating lease income and depreciation expense for the periods indicated:
| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Operating lease income | $ | 1,859 |  |  | $ | 1,505 |  |  |  |  |
Depreciation expense | 1,643 |  |  | 1,266 |  |  |  |  |
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024 | $ | 5,546 |
2025 | 6,042 |
2026 | 4,120 |
2027 | 1,529 |
2028 | 1,253 |
Thereafter | 2,373 |
Total of future minimum payments | $ | 20,863 |
As Lessor - Financing Leases Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment of the loan portfolio. For the three months ended March 31, 2024 and 2023, interest income on equipment finance leases totaled $1,055 and $860, respectively. The lease receivable component of finance lease net investment included within the equipment finance class of financing receivables was $69,442 and $70,150 at March 31, 2024 and December 31, 2023, respectively. The following schedule summarizes, as of March 31, 2024, aggregate future minimum finance lease payments to be received:
Remainder of 2024 | $ | 19,700 |
2025 | 20,943 |
2026 | 16,821 |
2027 | 12,171 |
2028 | 5,847 |
Thereafter | 4,503 |
Total undiscounted minimum lease payments | 79,985 |
Less: amount representing interest | (10,543) |
Total lease receivable | $ | 69,442 |

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- 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
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- 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
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