Leases

12 Months Ended

Dec. 31, 2022

We lease three retail branches and a parcel of land for a retail branch location. These leases generally have remaining terms of 10 years or less except the land lease, which has a remaining lease term of eighty-three years. Some of the leases may include options to renew the leases. The exercise of lease renewal is at our sole discretion.

Our right-of-use assets and lease liabilities for operating leases are included in other assets and other liabilities on our consolidated balance sheets. We use the interest rate implicit in the lease or incremental borrowing rate in determining the present value of lease payments. At December 31, 2022, we had future minimum lease payments of $27.6 million and imputed interest of $24.5 million and lease liability of $2.7 million. The weighted average remaining lease term was 46.3 years and weighted average discount rate was 7.14% at December 31, 2022, respectively. Our operating lease expense is included in

occupancy expenses within non-interest expense in our consolidated statements of income. Total operating lease expense consists of operating lease cost, which is recognized on a straight-line basis over the lease term, and variable lease cost, which is recognized based on actual amounts incurred.

The following table presents information about our operating leases at the year ended December 31, 2022.


Dollars in thousands	2022
Lease right of use assets (ROU)	$	2,656
Lease liabilities	$	2,656

The following table presents future undiscounted cash flows on our operating leases:


Years Ending December 31,	(Dollars in thousands)
2023	$	332
2024	348
2025	352
2026	283
2027	187
Thereafter	26,114
Total undiscounted lease payments	$	27,616
Impact of present value discount	$	(24,535)