Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Note 6 – Leases

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows.  Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease.  Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s long-term lease agreements are classified as operating leases. Certain leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised.  The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases:

(Dollars in thousands)	March 31, 2023			December 31, 2022
Lease liabilities	$	9,642		$	9,908
Right-of-use assets	$	9,344		$	9,629
Weighted average remaining lease term		12.46	years		12.55	years
Weighted average discount rate		2.54	%		2.50	%

	For the Three Months Ended
Lease cost (in thousands)	March 31, 2023		March 31, 2022
Operating lease cost	$	340	$	351
Short-term lease cost		—		—
Total lease cost	$	340	$	351
Cash paid for amounts included in the measurement of lease liabilities	$	322	$	327

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows:

	As of
Lease payments due (in thousands)	March 31, 2023
Nine months ending December 31, 2023	$	909
2024		1,141
2025		917
2026		916
2027		849
Thereafter		6,584
Total undiscounted cash flows	$	11,316
Discount		1,674
Lease liabilities	$	9,642

Total gross rental income was $393 thousand for the three months ended March 31, 2023 and $272 thousand for the three months ended March 31, 2022.

The following table presents our minimum future annual rental income on such leases as of March 31, 2023.

	As of
(In thousands)	March 31, 2023
Nine months ending December 31, 2023	$	655
2024		701
2025		719
2026		737
2027		418
Thereafter		1,554
Total	$	4,784