Note 6 - Leases

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Lessee, Leases [Text Block]

NOTE 6: LEASES

At December 31, 2021 and 2020, operating Right of Use (“ROU”) assets were $8,034,417 and $8,469,661, respectively with corresponding liabilities of $8,164,317 and $8,560,892, respectively. Additionally, as of December 31, 2021 and 2020, the Company had financing ROU assets of $538,712 and $510,526, respectively with corresponding liabilities of $538,712 and $510,526, respectively. We maintain operating leases on land and buildings for certain branch facilities and our headquarters. Financing leases are primarily for equipment used at banking facilities. Most leases include options to renew, with renewal terms extending between one to twenty years. The exercise of renewal options is based on judgement of management as to whether or not the renewal option is reasonably certain to be exercised. Factors in determining whether or not the renewal option is reasonably certain to be exercised include, but are not limited to, the value of the leasehold improvements, the value of the renewal rate compared to market rates and the presence of factors that would cause significant economic penalty to the Company if the option is not exercised.

Expenses for finance leases are included in other interest expense and occupancy expense line items, whereas, operating leases are expensed entirely in the occupancy expense line item. Leases with a term of less than twelve months are not recorded on the balance sheet and are expensed on a straight-line basis over the lease term. Discount rates used for the purpose of valuing the leases were based on rates available to the Company on fixed rate borrowings for similar lease terms.

The components of lease expense and their impact on the statement of income as of December 31, 2021 and 2020 is as follows:

	Year ended
	December 31,
	2021			2020
	(In Thousands)
Finance lease cost:
Amortization of right-of-use assets	$	200,994		$	142,582
Interest on lease liabilities		6,648			7,736
Operating lease cost		1,080,057			1,081,620
Sublease income		(39,900	)		(47,200	)
Total lease costs	$	1,247,799		$	1,184,738
Additional lease information:
Weighted-average remaining lease term - financing leases (in years)		3.2			3.4
Weighted-average remaining lease term - operating leases (in years)		13.6			14.4
Weighted-average discount rate - financing leases		1.06	%		1.32	%
Weighted-average discount rate - operating leases		5.75	%		5.68	%

The following table sets forth the future minimum lease cash payments and a reconciliation of the undiscounted cash flows to the lease liability as of December 31, 2021:

	Financing			Operating			Total
				(In Thousands)
2022	$	216		$	1,049		$	1,265
2023		143			1,053			1,196
2024		100			894			994
2025		72			790			862
2026		15			765			780
Thereafter		-			7,475			7,475
Total undiscounted future minimum lease cash payments	$	546		$	12,026		$	12,572
Present value discount		(7	)		(3,862	)		(3,869	)
Lease liability	$	539		$	8,164		$	8,703