Leases

6 Months Ended

Jun. 30, 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 37 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 Jun 30,				Six Months Ended Jun 30,
(in thousands)	2025		2024		2025		2024
Operating lease costs	$	1,682	$	1,551	$	3,384	$	3,096
Finance lease costs	1		23		2		46
Operating lease cash flows	1,653		1,592		3,328		3,436
Finance lease cash flows	23		23		46		46

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	Jun 30, 2025		Dec 31, 2024
Operating lease right-of-use asset	Premises and equipment	$	31,795	$	33,202

Operating lease liability	Accrued expenses and other liabilities	34,246		35,596
Finance lease liability	Other long-term funding	250		295

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


	Jun 30, 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	$	36,813	7.91	4.29	%	$	39,072	8.30	4.26	%
Land	3,567		6.36	3.82	%	3,228		6.63	3.52	%
Equipment	204		1.00	4.62	%	204		1.50	4.62	%
Total operating leases	$	40,584	7.73	4.25	%	$	42,505	8.13	4.20	%
Finance leases
Retail and corporate offices	$	255	2.75	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
Six months ended December 31, 2025	$	3,523	$	46	$	3,570
2026	6,638		93		6,730
2027	5,875		93		5,968
2028	5,135		23		5,158
2029	3,836		—		3,836
Beyond 2029	15,577		—		15,577
Total lease payments	$	40,584	$	255	$	40,839
Less: interest	6,338		4		6,342
Present value of lease payments	$	34,246	$	250	$	34,497

There are no leases that had not yet commenced as of June 30, 2025. Rental income generated by the Corporation's leases is included within occupancy expense on the consolidated statements of income.