Leases

3 Months Ended

Mar. 31, 2025

The Corporation has operating leases for retail and corporate offices, land, and equipment. The Corporation also has a finance lease for retail and corporate offices.

These leases have original terms of 1 year or longer with remaining maturities up to 38 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any purchase options or optional periods that the Corporation is reasonably likely to extend have been included in the capitalization.

The discount rate used to capitalize the operating leases is the FHLB borrowing rate on the date of lease commencement. When determining the rate to discount specific lease obligations, the repayment period and term are considered.

Operating and finance lease costs and cash flows resulting from these leases are presented below:


	Three Months Ended Mar 31,
($ in thousands)	2025		2024
Operating lease costs	$	1,702	$	1,545
Finance lease costs	1		23
Operating lease cash flows	1,675		1,844
Finance lease cash flows	23		23

The right-of-use asset and lease liability by lease classifications on the consolidated balance sheets were as follows:


($ in thousands)	Consolidated Balance Sheets Category	Mar 31, 2025		Dec 31, 2024
Operating lease right-of-use asset	Premises and equipment	$	32,509	$	33,202

Operating lease liability	Accrued expenses and other liabilities	34,931		35,596
Finance lease liability	Other long-term funding	273		295

The lease payment obligations, weighted-average remaining lease term, and weighted-average original discount rate were as follows:


	Mar 31, 2025					Dec 31, 2024
($ in thousands)	Lease Payments		Weighted-average Lease Term (in years)	Weighted-average Discount Rate		Lease Payments		Weighted-average Lease Term (in years)	Weighted-average Discount Rate
Operating leases
Retail and corporate offices	$	37,595	8.15	4.27	%	$	39,072	8.30	4.26	%
Land	3,766		6.48	3.81	%	3,228		6.63	3.52	%
Equipment	204		1.25	4.62	%	204		1.50	4.62	%
Total operating leases	$	41,565	7.96	4.23	%	$	42,505	8.13	4.20	%
Finance leases
Retail and corporate offices	$	278	3.00	1.32	%	$	301	3.25	1.32	%

Total finance leases	$	278	3.00	1.32	%	$	301	3.25	1.32	%

Contractual lease payment obligations for each of the next five years and thereafter, in addition to a reconciliation to the Corporation’s lease liability, were as follows:


($ in thousands)	Operating Leases		Finance Leases		Total Leases
Nine months ended December 31, 2025	$	5,121	$	69	$	5,191
2026	6,397		93		6,490
2027	5,741		93		5,833
2028	4,998		23		5,021
2029	3,732		—		3,732
Beyond 2029	15,577		—		15,577
Total lease payments	$	41,565	$	278	$	41,843
Less: interest	6,635		5		6,640
Present value of lease payments	$	34,931	$	273	$	35,203

As of March 31, 2025 and December 31, 2024, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $1 million and $2 million of future lease obligations, respectively. The leases that had not yet commenced as of March 31, 2025 will commence in April 2025 with lease terms of 3 years to 7 years. Rental income generated by the Corporation's leases is included within occupancy expense on the consolidated statements of income.