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Leases
9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases

Note 7. 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 for a term similar to the length of the lease, including any probable renewal options available. 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.

Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term. Payments for leases with terms longer than twelve months are included in the determination of the lease liability.

Each of the Company’s long-term lease agreements are classified as operating leases. Certain of these 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 assured 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):

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Lease liability

 

$

6,551

 

 

$

7,463

 

Right-of-use asset

 

$

6,941

 

 

$

7,970

 

Weighted average remaining lease term

 

5.68 years

 

 

6.19 years

 

Weighted average discount rate

 

 

1.97

%

 

 

1.98

%

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

Lease Expense:

 

2022

 

 

2021

 

 

 

 

 

2021

 

Operating lease expense

 

$

437

 

 

$

420

 

 

$

1,331

 

 

$

1,069

 

Short-term lease expense

 

 

196

 

 

 

127

 

 

 

387

 

 

 

188

 

Total lease expense

 

$

633

 

 

$

547

 

 

$

1,718

 

 

$

1,257

 

Cash paid for amounts included in
   lease liabilities

 

$

408

 

 

$

390

 

 

$

1,240

 

 

$

998

 

 

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):

Undiscounted Cash Flow

 

September 30, 2022

 

Three months ending December 31, 2022

 

$

409

 

Twelve months ending December 31, 2023

 

 

1,567

 

Twelve months ending December 31, 2024

 

 

1,296

 

Twelve months ending December 31, 2025

 

 

1,091

 

Twelve months ending December 31, 2026

 

 

748

 

Thereafter

 

 

1,791

 

Total undiscounted cash flows

 

$

6,902

 

Less: Discount

 

 

(351

)

Lease liability

 

$

6,551