Leases

9 Months Ended

Sep. 30, 2025

Operating Leases

The Company leases certain office space, stand-alone buildings and equipment which are recognized as operating lease right-of-use (“ROU”) assets and operating lease liabilities and are included in the consolidated balance sheets. Lease liabilities represent the Company's liability to make lease payments under these leases, on a discounted basis. For leases with renewal options available, the Company evaluates each lease to determine if exercise of the renewal option is reasonably certain. As of September 30, 2025, the Company's operating lease ROU asset and operating lease liability totaled $17.7 million and $18.7 million, respectively.

In order to calculate its ROU assets and lease liabilities, ASC Topic 842 requires the Company to use the rate of interest implicit in the lease when readily determinable. If the rate implicit in the lease is not readily determinable, the Company is required to use its incremental borrowing rate, which is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment. The Company was unable to determine the implicit interest rate in any of the leases and therefore used its incremental borrowing rate.

As of September 30, 2025 and December 31, 2024, the weighted-average discount rate for the Company's operating leases was 4.76% and 4.73%, respectively. The Company's lease terms range from less than one year to one hundred forty-four months. As of September 30, 2025 and December 31, 2024, the weighted-average remaining term of the leases was 7.04 years and 7.78 years, respectively.

Lease costs for the three and nine months ended September 30, 2025 and 2024 were as follows and are included in occupancy and equipment expense on the consolidated statements of income:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Dollars in thousands)	2025		2024		2025		2024
Operating lease cost	$	814	$	835	$	2,491	$	2,512
Short-term lease cost		2		10		7		29
Variable lease cost		342		341		1,054		987
Total lease cost	$	1,158	$	1,186	$	3,552	$	3,528

A schedule of the Company's lease liabilities by contractual maturity for operating leases with initial or remaining terms in excess of one year for each year through 2030 and thereafter is presented below:


(Dollars in thousands)	September 30, 2025
2025 (three months remaining)	$	823
2026		3,346
2027		3,383
2028		3,151
2029		2,985
2030		2,538
Thereafter		5,758
Total undiscounted lease liability		21,984
Less: Discount on cash flows		(3,249	)
Total operating lease liability	$	18,735