Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

(In Thousands)

The Company enters into leases in both lessor and lessee capacities.

Lessor Arrangements

As of December 31, 2023 and 2022, the net investment in these leases was $42,761 and $44,049, comprised of $34,929 and $37,301 in lease receivables, $13,446 and $12,875 in residual balances and $5,614 and $6,127 in deferred income, respectively. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases.

For the twelve months ended December 31, 2023 and 2022, the Company generated $1,441 and $903 in income from these leases, respectively, which is included in interest income on loans on the Consolidated Statements of Income.

The maturities of the lessor arrangements outstanding at December 31, 2023 is presented in the table below.

2024	$	313
2025	663
2026	1,006
2027	7,812
2028	574
Thereafter	32,393
Total lease receivables	$	42,761

Lessee Arrangements

As of December 31, 2023 and 2022, right-of-use assets totaled $48,517 and $54,930 and lease liabilities totaled $51,130 and $57,369, respectively. The table below provides the components of lease cost and supplemental information for the periods presented.

	Year ended December 31,
	2023			2022
Operating lease cost (cost resulting from lease payments)	$	7,333		$	7,847
Short-term lease cost	217			29
Variable lease cost (cost excluded from lease payments)	800			1,056
Sublease income	(551)			(624)
Net lease cost	$	7,799		$	8,308
Operating lease - operating cash flows (fixed payments)	7,171			9,528
Operating lease - operating cash flows (liability reduction)	5,472			7,789
Weighted average lease term - operating leases (in years) (at period end)	18.51			17.96
Weighted average discount rate - operating leases (at period end)	3.49		%	3.02		%
Right-of-use assets obtained in exchange for new lease liabilities - operating leases	$	3,126		$	3,475

The maturities of the lessee arrangements outstanding at December 31, 2023 are presented in the table below.

2024	$	6,340
2025	5,593
2026	4,909
2027	4,277
2028	4,020
Thereafter	44,967
Total undiscounted cash flows	70,106
Discount on cash flows	18,976
Total operating lease liabilities	$	51,130

Rental expense was $6,859, $7,623, and $8,298 for 2023, 2022, and 2021, respectively.

For more information on lease accounting, see Note 1, “Significant Accounting Policies” and on lease financing receivables, see Note 3, “Loans.”

Leases

Leases

(In Thousands)

The Company enters into leases in both lessor and lessee capacities.

Lessor Arrangements

As of December 31, 2023 and 2022, the net investment in these leases was $42,761 and $44,049, comprised of $34,929 and $37,301 in lease receivables, $13,446 and $12,875 in residual balances and $5,614 and $6,127 in deferred income, respectively. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases.

For the twelve months ended December 31, 2023 and 2022, the Company generated $1,441 and $903 in income from these leases, respectively, which is included in interest income on loans on the Consolidated Statements of Income.

The maturities of the lessor arrangements outstanding at December 31, 2023 is presented in the table below.

2024	$	313
2025	663
2026	1,006
2027	7,812
2028	574
Thereafter	32,393
Total lease receivables	$	42,761

Lessee Arrangements

As of December 31, 2023 and 2022, right-of-use assets totaled $48,517 and $54,930 and lease liabilities totaled $51,130 and $57,369, respectively. The table below provides the components of lease cost and supplemental information for the periods presented.

	Year ended December 31,
	2023			2022
Operating lease cost (cost resulting from lease payments)	$	7,333		$	7,847
Short-term lease cost	217			29
Variable lease cost (cost excluded from lease payments)	800			1,056
Sublease income	(551)			(624)
Net lease cost	$	7,799		$	8,308
Operating lease - operating cash flows (fixed payments)	7,171			9,528
Operating lease - operating cash flows (liability reduction)	5,472			7,789
Weighted average lease term - operating leases (in years) (at period end)	18.51			17.96
Weighted average discount rate - operating leases (at period end)	3.49		%	3.02		%
Right-of-use assets obtained in exchange for new lease liabilities - operating leases	$	3,126		$	3,475

The maturities of the lessee arrangements outstanding at December 31, 2023 are presented in the table below.

2024	$	6,340
2025	5,593
2026	4,909
2027	4,277
2028	4,020
Thereafter	44,967
Total undiscounted cash flows	70,106
Discount on cash flows	18,976
Total operating lease liabilities	$	51,130

Rental expense was $6,859, $7,623, and $8,298 for 2023, 2022, and 2021, respectively.

For more information on lease accounting, see Note 1, “Significant Accounting Policies” and on lease financing receivables, see Note 3, “Loans.”