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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, 2024December 31, 2023
Supplemental balance sheet information
ROU assets$8,967 $9,259 
Lease liabilities$10,625 $10,975 
Weighted-average remaining lease terms (years)8.68.8
Weighted-average discount rate3.43 %3.41 %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024$1,392 
20251,712 
20261,703 
20271,727 
20281,535 
Thereafter4,370 
Total undiscounted minimum lease payments12,439 
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,
20242023
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 expense1,643 1,266 
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024$5,546 
20256,042 
20264,120 
20271,529 
20281,253 
Thereafter2,373 
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 
202520,943 
202616,821 
202712,171 
20285,847 
Thereafter4,503 
Total undiscounted minimum lease payments79,985 
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, 2024December 31, 2023
Supplemental balance sheet information
ROU assets$8,967 $9,259 
Lease liabilities$10,625 $10,975 
Weighted-average remaining lease terms (years)8.68.8
Weighted-average discount rate3.43 %3.41 %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024$1,392 
20251,712 
20261,703 
20271,727 
20281,535 
Thereafter4,370 
Total undiscounted minimum lease payments12,439 
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,
20242023
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 expense1,643 1,266 
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024$5,546 
20256,042 
20264,120 
20271,529 
20281,253 
Thereafter2,373 
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 
202520,943 
202616,821 
202712,171 
20285,847 
Thereafter4,503 
Total undiscounted minimum lease payments79,985 
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, 2024December 31, 2023
Supplemental balance sheet information
ROU assets$8,967 $9,259 
Lease liabilities$10,625 $10,975 
Weighted-average remaining lease terms (years)8.68.8
Weighted-average discount rate3.43 %3.41 %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024$1,392 
20251,712 
20261,703 
20271,727 
20281,535 
Thereafter4,370 
Total undiscounted minimum lease payments12,439 
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,
20242023
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 expense1,643 1,266 
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024$5,546 
20256,042 
20264,120 
20271,529 
20281,253 
Thereafter2,373 
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 
202520,943 
202616,821 
202712,171 
20285,847 
Thereafter4,503 
Total undiscounted minimum lease payments79,985 
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, 2024December 31, 2023
Supplemental balance sheet information
ROU assets$8,967 $9,259 
Lease liabilities$10,625 $10,975 
Weighted-average remaining lease terms (years)8.68.8
Weighted-average discount rate3.43 %3.41 %
The following schedule summarizes aggregate future minimum lease payments under these operating leases at March 31, 2024:
Remainder of 2024$1,392 
20251,712 
20261,703 
20271,727 
20281,535 
Thereafter4,370 
Total undiscounted minimum lease payments12,439 
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,
20242023
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 expense1,643 1,266 
The following schedule summarizes aggregate future minimum lease payments to be received at March 31, 2024:
Remainder of 2024$5,546 
20256,042 
20264,120 
20271,529 
20281,253 
Thereafter2,373 
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 
202520,943 
202616,821 
202712,171 
20285,847 
Thereafter4,503 
Total undiscounted minimum lease payments79,985 
Less: amount representing interest(10,543)
Total lease receivable$69,442