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Leases
3 Months Ended
Mar. 31, 2023
Leases  
Leases

Note 10 — Leases

The Company has operating leases and finance leases all comprised of real estate property. The operating leases comprise substantially all of the Company’s obligations in which the Company is the lessee, with remaining lease terms ranging between 2 and 9 years. Most operating lease agreements consist of initial lease terms ranging between 5 and 10 years, with options to renew the leases or extend the term. The finance lease has a remaining lease term of 95 years. The payment structure of all leases is fixed rental payments with lease payments increasing on pre-determined dates at either a predetermined amount or change in the consumer price index.

In accordance with ASC 842, the Company recognized operating and financing lease assets and corresponding lease liabilities related to office facilities and retail branches. The operating and financing lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. The Company has elected that any short term leases would be expensed as incurred.

The operating and financing lease asset and lease liability are determined at the commencement date of the lease based on the present value of the lease payments. Our leases do not provide an implicit interest rate. The company used its incremental borrowing rate, the rate of interest to borrow in a collateralized basis for a similar term, at the lease commencement date.

All of the leases are net leases and, therefore, do not contain non-lease components. The Company either pays directly or reimburses the lessor for property and casualty insurance cost and the property taxes assessed on the property, as well as a portion of the common area maintenance associated with the property which are categorized as non-components as outlined in the applicable guidance.

At March 31, 2023 and December 31, 2022, the quantitative data relating to the Company’s leases are as follows (in thousands):

    

March 31, 

    

December 31, 

 

2023

2022

 

Finance Lease Amounts:

 

  

 

  

ROU asset

$

354

$

355

Lease liability

$

542

$

533

Operating Lease Amounts:

 

 

ROU assets

$

2,182

$

2,312

Lease liabilities

$

2,234

$

2,363

Weighted-average remaining lease term

 

  

 

  

Finance lease

 

93.75 years

 

94 years

Operating leases

 

6.07 years

 

6.19 years

Weighted-average discount rate

 

  

 

  

Finance lease

 

9.50

%  

 

9.50

%

Operating leases

 

1.46

%  

 

1.50

%

The components of lease expense and cash flow information related to leases as follows:

    

Three Months Ended March 31, 

 

2023

    

2022

 

(Dollars In Thousands)

Finance Lease Cost

Amortization of ROU asset

$

1

$

1

Interest on lease liability

$

9

$

9

Operating Lease Costs

$

144

$

142

Cash paid for amounts included in the measurement of lease liabilities

 

 

  

Finance lease

$

$

Operating leases

$

142

$

138

Maturities of lease liabilities at March 31, 2023 are as follows (in thousands):

    

Operating

    

Finance

Leases

Lease

Years ended December 31:

2023

$

380

$

23

2024

 

436

 

30

2025

 

398

 

30

2026

 

235

 

31

2027

 

239

 

33

Thereafter

 

636

 

4,016

Total lease payments

$

2,324

$

4,163

Interest

 

(90)

 

(3,621)

Lease liability

$

2,234

$

542