Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Note 7. Leases

The Corporation leases various assets in the course of its operations that are subject to recognition on the balance sheet. The Corporation considers all of its leases to be operating leases and it has no finance leases. The leased assets are comprised of equipment, and buildings and land (collectively real estate). The equipment leases are shorter-term than the real estate leases, and generally have a fixed payment over a defined term without renewal options. Certain equipment leases have purchase options and it was determined the option was not reasonably certain to be exercised. The real estate leases are longer-term and may contain renewal options after the initial term, but none of the real estate leases contain a purchase option. The renewal options on real estate leases were reviewed and if it was determined the option was reasonably certain to be renewed, the option term was considered in the determination of the lease liability. There is only one real estate lease with a variable payment based on an index included in the lease liability. None of the leases contain any restrictive covenants and there are no significant leases that have not yet commenced. The discount rate used to determine the lease liability is based on the Bank’s fully secured borrowing rate from the Federal Home Loan Bank for a term similar to the lease term. Operating lease expense is included in net occupancy expense in the consolidated statements of income.

Lease costs:

The components of total lease cost were as follows:

	Three Months Ended ‎June 30,				Six Months Ended ‎June 30,
(Dollars in thousands)	2022		2021		2022		2021
Operating lease cost	$	200	$	174	$	373	$	348
Short-term lease cost		126		—		252		—
Variable lease cost		28		25		53		49
Total lease cost	$	354	$	199	$	678	$	397

Supplemental Lease Information:

	Six Months Ended ‎June 30,
(Dollars in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	359	$	326
Weighted-average remaining lease term (years)		10.2		11.3
Weighted-average discount rate		3.29%		3.35%

‎

Lease Obligations:

Future undiscounted lease payments for operating leases with initial terms of one year or more as of June 30, 2022 are as follows:

(Dollars in thousands)
2022	$	366
2023		743
2024		722
2025		671
2026		563
2027 and beyond		2,931
Undiscounted cash flow		5,996
Imputed Interest		(986)
Total lease liability	$	5,010