
	Estimated Useful Life	2025		2024
	(dollars in thousands)
Land	Indefinite	$	14,814	$	14,471
Buildings and improvements	10-50 years	77,702		75,063
Operating lease right of use asset	1-25 years	53,654		56,097
Leasehold improvements	5-40 years	42,220		40,765
Furniture and equipment	3-7 years	73,975		72,538
Software	3-7 years	43,473		42,989
Subtotal		305,838		301,923
Less accumulated depreciation and amortization		191,555		185,815
Total premises and equipment, net		$	114,283	$	116,108

Depreciation related to premises and equipment included in noninterest expense for the years ended December 31, 2025, 2024 and 2023 amounted to $9.4 million, $9.4 million and $9.6 million, respectively. Amortization of lease right-of-use assets, which is included in noninterest expense, totaled $2.6 million in 2025, $3.7 million in 2024 and $3.6 million in 2023.

First Commonwealth has elected to apply certain practical expedients under ASU 2016-02 "Leases" ("Topic 842"), including: (i) to not apply the requirements in the new standard to short-term leases (ii) to not reassess the lease classification for any expired or existing lease (iii) to account for lease and non-lease components separately, and (iv) to not reassess initial direct costs for any existing leases. The impact of this standard primarily relates to operating leases of certain real estate properties,

primarily certain branch and ATM locations and office space. First Commonwealth has no material leasing arrangements for which it is the lessor of property or equipment.

The following table represents the lease costs and other lease information for the years ended December 31.


	2025			2024
	(dollars in thousands)
Balance sheet:
Operating lease asset classified as premises and equipment	$	38,170		$	40,171
Operating lease liability classified as other liabilities	42,627			44,654
Income statement:
Operating lease cost classified as occupancy and equipment expense	$	5,624		$	5,740

Weighted average lease term, in years	12.30			12.96
Weighted average discount rate	3.88		%	3.77		%
Operating cash flows	$	5,646		$	5,741

The ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. First Commonwealth's lease agreements often include one or more options to renew at the Company's discretion. If we consider the renewal option to be reasonably certain, we include the extended term in the calculation of the ROU asset and lease liability.

First Commonwealth uses incremental borrowing rates when calculating the lease liability because the rate implicit in the lease is not readily determinable. The incremental borrowing rate used by First Commonwealth is an amortizing loan rate obtained from the FHLB. This rate is consistent with a collateralized borrowing rate and is available for terms similar to the lease payment schedules.

The following table reconciles future minimum lease payments due under non-cancelable operating leases (those amounts subject to recognition) to the lease liability as of December 31, 2025 (dollars in thousands):



For the twelve months ended December 31,
2026	$	5,351
2027	5,070
2028	4,742
2029	4,678
2030	4,217
Thereafter	30,181
Total future minimum lease payments	54,239
Less remaining imputed interest	11,612
Operating lease liability	$	42,627