Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Note 6 – Leases

Lessor Arrangements

Trustmark leases certain types of machinery and equipment to its customers through sales-type and direct financing leases as part of its equipment financing portfolio. These leases generally have remaining lease terms of two to nine years, some of which include renewal options and/or options for the lessee to purchase the leased property near or at the end of the lease term. Trustmark recognized interest income from its sales-type and direct financing leases of $2.4 million for the three months ended March 31, 2024. Trustmark does not have any significant operating leases in which it is the lessor.

The table below summarizes the components of Trustmark's net investment in its sales-type and direct financing leases for the periods presented ($ in thousands):

	March 31, 2024			December 31, 2023
Leases receivable	$	202,112		$	161,319
Unearned income		(35,463	)		(29,011	)
Initial direct costs		1,737			1,326
Unguaranteed lease residual		5,577			4,101
Total net investment	$	173,963		$	137,735

The table below details the minimum future lease payments for Trustmark's leases receivable at March 31, 2024 ($ in thousands):

	March 31, 2024
2024 (excluding the three months ended March 31, 2024)	$	24,711
2025		33,074
2026		31,972
2027		44,528
2028		28,216
Thereafter		39,611
Lease receivable	$	202,112

Lessee Arrangements

The following table details the components of net lease cost for the periods presented ($ in thousands):

	Three Months Ended March 31,
	2024			2023
Finance leases:
Amortization of right-of-use assets	$	113		$	357
Interest on lease liabilities		38			42
Operating lease cost		1,294			1,285
Short-term lease cost		21			89
Variable lease cost		215			255
Sublease income		(3	)		(3	)
Net lease cost	$	1,678		$	2,025

The following table details the cash payments included in the measurement of lease liabilities during the periods presented ($ in thousands):

	Three Months Ended March 31,
	2024		2023
Finance leases:
Operating cash flows included in operating activities	$	38	$	42
Financing cash flows included in payments under finance lease obligations		99		342
Operating leases:
Operating cash flows (fixed payments) included in other operating activities, net		1,212		1,242
Operating cash flows (liability reduction) included in other operating activities, net		865		944

The following table details balance sheet information, as well as weighted-average lease terms and discount rates, related to leases at March 31, 2024 and December 31, 2023 ($ in thousands):

	March 31, 2024			December 31, 2023
Finance lease right-of-use assets, net of accumulated depreciation	$	3,638		$	3,751
Finance lease liabilities		4,234			4,334
Operating lease right-of-use assets		36,659			38,142
Operating lease liabilities		40,185			41,584
Weighted-average lease term:
Finance leases	8.09 years			8.34 years
Operating leases	10.00 years			10.13 years
Weighted-average discount rate:
Finance leases		3.61	%		3.61	%
Operating leases		3.64	%		3.64	%

At March 31, 2024, future minimum rental commitments under finance and operating leases were as follows ($ in thousands):

	Finance Leases			Operating Leases
2024 (excluding the three months ended March 31, 2024)	$	435		$	3,718
2025		584			4,998
2026		589			4,846
2027		594			4,900
2028		599			4,749
Thereafter		2,086			25,452
Total minimum lease payments		4,887			48,663
Less imputed interest		(653	)		(8,478	)
Lease liabilities	$	4,234		$	40,185