Premises and Equipment

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Premises and Equipment

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment as of the periods shown:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Land	$	4,062	$	3,465
Buildings and improvements	13,393		13,393
Furniture, fixtures and equipment	15,856		18,300
Software	6,775		7,140
Construction in progress	271		45
Leasehold improvements	2,836		2,836
	43,193		45,179
Accumulated depreciation	(24,355)		(24,251)
Premises and equipment, net	$	18,838	$	20,928

We lease certain premises and equipment under operating and finance leases. At September 30, 2024, we had lease liabilities totaling $12.9 million and right-of-use assets totaling $11.7 million, substantially all of which was related to operating leases. At September 30, 2024, the weighted-average remaining lease term for operating leases was 10.1 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.1%.

At December 31, 2023, we had lease liabilities totaling $14.0 million and right-of-use assets totaling $12.9 million, substantially all of which was related to operating leases. At December 31, 2023, the weighted-average remaining lease term for operating leases was 10.5 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.1%.

Lease liabilities and right-of-use assets are reflected in accrued interest payable and other liabilities and accrued interest receivable and other assets, respectively.

The following table presents lease costs for the periods shown:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2024		2023		2024		2023
Amortization of right-of-use assets, finance leases	$	—	$	1	$	1	$	9
Operating lease cost	537		435		1,439		1,331
Short-term lease cost	—		—		—		8
Variable lease cost	—		6		—		26
Sublease income	(97)		(114)		(291)		(288)
Total lease cost	$	440	$	328	$	1,149	$	1,086

For operating leases with initial or remaining terms of one year or more as of September 30, 2024, the following table presents future minimum payments for the twelve month periods ended September 30:

(Dollars in thousands)	Operating Leases
2025	$	1,728
2026	1,604
2027	1,625
2028	1,651
2029	1,502
2030 and thereafter	7,211
Total future minimum lease payments	$	15,321
Less: Amounts representing interest	(2,413)
Present value of net future minimum lease payments	$	12,908

Future minimum payments on finance leases were not material as of September 30, 2024.

Premises and Equipment

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment as of the periods shown:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Land	$	4,062	$	3,465
Buildings and improvements	13,393		13,393
Furniture, fixtures and equipment	15,856		18,300
Software	6,775		7,140
Construction in progress	271		45
Leasehold improvements	2,836		2,836
	43,193		45,179
Accumulated depreciation	(24,355)		(24,251)
Premises and equipment, net	$	18,838	$	20,928

We lease certain premises and equipment under operating and finance leases. At September 30, 2024, we had lease liabilities totaling $12.9 million and right-of-use assets totaling $11.7 million, substantially all of which was related to operating leases. At September 30, 2024, the weighted-average remaining lease term for operating leases was 10.1 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.1%.

At December 31, 2023, we had lease liabilities totaling $14.0 million and right-of-use assets totaling $12.9 million, substantially all of which was related to operating leases. At December 31, 2023, the weighted-average remaining lease term for operating leases was 10.5 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.1%.

Lease liabilities and right-of-use assets are reflected in accrued interest payable and other liabilities and accrued interest receivable and other assets, respectively.

The following table presents lease costs for the periods shown:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2024		2023		2024		2023
Amortization of right-of-use assets, finance leases	$	—	$	1	$	1	$	9
Operating lease cost	537		435		1,439		1,331
Short-term lease cost	—		—		—		8
Variable lease cost	—		6		—		26
Sublease income	(97)		(114)		(291)		(288)
Total lease cost	$	440	$	328	$	1,149	$	1,086

For operating leases with initial or remaining terms of one year or more as of September 30, 2024, the following table presents future minimum payments for the twelve month periods ended September 30:

(Dollars in thousands)	Operating Leases
2025	$	1,728
2026	1,604
2027	1,625
2028	1,651
2029	1,502
2030 and thereafter	7,211
Total future minimum lease payments	$	15,321
Less: Amounts representing interest	(2,413)
Present value of net future minimum lease payments	$	12,908

Future minimum payments on finance leases were not material as of September 30, 2024.