Leases

12 Months Ended

Dec. 31, 2022

LEASES

The Corporation enters into leases for certain retail branches, office space, land and equipment. Operating leases are included in other assets and the lease liability is included in other liabilities in our balance sheets. The Corporation does not have any finance leases.

Right-of-use (ROU) assets represent the Corporation's right to use an underlying asset for the lease term and lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Corporation uses its incremental borrowing rate at commencement date in determining the present value of lease payments when the rate implicit in a lease is not known. The Corporation's incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term and other factors. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The Corporation's leases are generally for periods of five to twenty years with various renewal options. The exercise of such lease renewal options is not included in the present value of lease obligations unless it is reasonably certain that the option will be exercised. The Corporation has lease agreements which contain both lease and non-lease components such as common area maintenance charges, real estate taxes, and insurance. Non-lease components are not included in the measurement of the lease liability and are recognized in expense when incurred. The Corporation has elected not to recognize short-term leases, with original lease terms of twelve months or less, on the Corporation's balance sheet. Certain of the Corporation's lease agreements include rental payments adjusted periodically for inflation. The Corporation's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2022 and 2021:


	2022			2021
Operating lease assets	$	23,619		$	17,818
Total lease assets	$	23,619		$	17,818

Operating lease liabilities	$	25,316		$	19,619
Total lease liabilities	$	25,316		$	19,619

Weighted average remaining lease term (years)
Operating leases	6.5			7.0
Weighted average discount rate
Operating leases	3.1		%	3.1		%

The table below presents the components of lease expense for the years ended December 31, 2022, 2021, and 2020:


	2022		2021		2020
Lease Cost:
Operating lease cost	$	5,233	$	3,710	$	3,724
Short-term lease cost	470		345		247
Variable lease cost	1,073		980		842
Sublease income	$	(23)	$	(33)	$	(43)
Total lease cost	$	6,753	$	5,002	$	4,770

Supplemental cash flow information related to leases is presented in the tables below.


Maturity of lease liabilities	Operating Leases
2023	$	5,610
2024	5,056
2025	4,673
2026	3,265
2027	2,468
2028 and after	7,068
Total lease payments	$	28,140
Less: Present value discount	2,824
Present value of lease liabilities	$	25,316


Other Information	Twelve Months Ended December 31, 2022		Twelve Months Ended December 31, 2021		Twelve Months Ended December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,329	$	3,773	$	3,629
ROU assets obtained in exchange for new operating lease liabilities	$	10,516	$	2,700	$	1,601