PREMISES, EQUIPMENT AND LEASES

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

PREMISES, EQUIPMENT AND LEASES

PREMISES, EQUIPMENT AND LEASES

A summary of premises, equipment and leases at June 30, 2024 and December 31, 2023 is as follows:

	June 30,		December 31,
(dollars in thousands)	2024		2023
Land	$	15,968	$	15,968
Buildings and improvements	79,431		78,104
Furniture and equipment	35,766		35,797
Lease right-of-use assets	8,409		7,673
Total	139,574		137,542
Accumulated depreciation	(56,534)		(54,728)
Premises and equipment, net	$	83,040	$	82,814

    Depreciation expense for the three and six months ended June 30, 2024 was $1.2 million and $2.5 million, respectively, and $1.2 million and $2.4 million for the three and six months ended June 30, 2023, respectively.

The Company has entered into operating leases, primarily for banking offices and operating facilities, which have remaining lease terms of 6 months to 14 years, some of which may include options to extend the lease terms for up to an additional 10 years. The options to extend are included in the remaining lease term if they are reasonably certain to be exercised. The Company had operating lease right-of-use assets of $8.4 million and $7.7 million as of June 30, 2024 and December 31, 2023, respectively, included in premises and equipment on our consolidated balance sheets. The operating lease liabilities of the Company were $9.9 million and $9.3 million as of June 30, 2024 and December 31, 2023, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.

Information related to operating leases for the three and six months ended June 30, 2024 and 2023 was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	2024			2023			2024			2023
Operating lease cost	$	481		$	493		$	957		$	977
Operating cash flows from leases	577			590			1,149			1,180
Right-of-use assets obtained in exchange for lease obligations	1,317			218			1,539			1,348
Weighted average remaining lease term	7.37 years			8.0 years			7.37 years			8.0 years
Weighted average discount rate	3.58		%	3.29		%	3.58		%	3.29		%

The projected minimum rental payments under the terms of the leases as of June 30, 2024 were as follows:

(dollars in thousands)	Amount
Year ending December 31:
2024 remaining	$	971
2025	1,652
2026	1,555
2027	1,413
2028	1,359
Thereafter	4,328
Total future minimum lease payments	11,278
Less imputed interest	(1,427)
Total operating lease liabilities	$	9,851