Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

11.   Leases

The Corporation leases certain branches under operating leases. At March 31, 2024, the Corporation had lease liabilities totaling $5,676,000 and right-of-use assets totaling $5,608,000 related to these leases. At December 31, 2023, the Corporation had lease liabilities totaling $5,456,000 and right-of-use assets totaling $5,392,000 related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At March 31, 2024, the weighted average remaining lease term for operating leases was 8.7 years and the weighted average discount rate used in the measurement of operating lease liabilities was 2.29%.

The calculated amount of the lease liabilities and right-of-use assets are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Corporation’s lease agreements often include one or more options to renew at the Corporation’s discretion. If at lease inception, the Corporation considers the exercising of a renewal option to be reasonably certain, the Corporation will include the extended term in the calculation of the lease liability and right-of-use asset. Regarding the discount rate, the new standard requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Corporation utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

The following table represents lease costs and other lease information. As the Corporation elected, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities.

Lease costs were as follows:

	Three Months Ended
(Dollar amounts in thousands)	March 31, 2024
Operating lease cost	$	257
Short-term lease cost		29
Variable lease cost		6
Total lease cost	$	292
Other information:
Cash paid for amounts included in the measurement of operating lease liabilities		242
Right-of-use assets obtained in exchange for new operating lease liabilities		429

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2024 were as follows:

(Dollar amounts in thousands)	March 31, 2024
Twelve Months Ended March 31,
2025	$	984
2026		943
2027		878
2028		869
2029		643
Thereafter		2,106
Total Future Minimum Lease Payments		6,423
Amounts Representing Interest		(747)
Present Value of Net Future Minimum Lease Payments	$	5,676