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 eight 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 $12.7 million and $3.2 million for the years ended December 31, 2024 and 2023, respectively. 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 at December 31, 2024 and 2023 ($ in thousands):


	December 31,
	2024			2023
Leases receivable	$	282,771		$	161,319
Unearned income		(45,585	)		(29,011	)
Initial direct costs		2,252			1,326
Unguaranteed lease residual		7,084			4,101
Total net investment	$	246,522		$	137,735

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


	December 31, 2024
2025	$	50,494
2026		49,906
2027		62,457
2028		52,086
2029		38,486
Thereafter		29,342
Total leases receivable	$	282,771

For Trustmark's lessee arrangements, the leases of FBBI are included in discontinued operations, and as a result, have been excluded from the amounts below. Prior period amounts have been reclassified. The table below details the components of net lease cost for the periods presented ($ in thousands):


	Years Ended December 31,
	2024			2023			2022
Finance leases
Amortization of right-of-use assets	$	452		$	786		$	1,479
Interest on lease liabilities		148			163			188
Operating lease cost		5,075			4,787			4,577
Short-term lease cost		230			229			307
Variable lease cost		841			840			1,080
Sublease income		(122	)		(12	)		(168	)
Net lease cost	$	6,624		$	6,793		$	7,463

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


	Years Ended December 31,
	2024		2023		2022
Finance leases
Operating cash flows included in operating activities	$	148	$	163	$	188
Financing cash flows included in payments under finance lease obligations		424		721		1,409
Operating leases
Operating cash flows (fixed payments) included in other operating activities, net		4,848		3,666		4,242
Operating cash flows (liability reduction) included in other operating activities, net		3,473		3,204		3,514

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


	December 31,
	2024			2023
Finance lease right-of-use assets, net of accumulated depreciation	$	3,299		$	3,751
Finance lease liabilities		3,910			4,334
Operating lease right-of-use assets		34,668			35,711
Operating lease liabilities		38,698			39,097

Weighted-average lease term
Finance leases	7.35 years			8.34 years
Operating leases	9.31 years			10.28 years

Weighted-average discount rate
Finance leases		3.61	%		3.61	%
Operating leases		3.72	%		3.67	%

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


	Finance Leases			Operating Leases
2025	$	584		$	5,288
2026		589			5,161
2027		594			5,193
2028		599			4,824
2029		633			4,655
Thereafter		1,454			21,258
Total minimum lease payments		4,453			46,379
Less imputed interest		(543	)		(7,681	)
Lease liabilities	$	3,910		$	38,698