Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 8. 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 may include 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 Cost:

The components of total lease cost were as follows for the period ending:

	For the years ended
	December 31
(Dollars in thousands)	2023		2022
Operating lease cost	$	815	$	779
Short-term lease cost		16		299
Variable lease cost		147		133
Total lease cost	$	978	$	1,211

Supplemental Lease Information:

	For the years ended
(Dollars in thousands)	December 31
Cash paid for amounts included in the measurement of lease liabilities:	2023		2022
Operating cash flows from operating leases	$	791	$	754
Weighted-average remaining lease term (years)		12.0		12.0
Weighted-average discount rate		3.40%		3.36%

Lease Obligations:

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2023 are as follows:

(Dollars in thousands)
2024	$	721
2025		666
2026		564
2027		421
2028		393
2029 and beyond		3,205
Undiscounted cash flows		5,970
Imputed interest		(1,154)
Total lease liability	$	4,816