Note 8 - Leases

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 8 – Leases

The right-of-use assets and lease liabilities relate to banking offices and other space occupied by the Company under noncancelable operating lease agreements. The aggregate right-of-use assets and lease liabilities are included in other assets and other liabilities, respectively, in the Company's consolidated balance sheets. Lease liabilities represent the Company's obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company's incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company's right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company's long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company's leases as of December 31, 2021 and 2020 and for the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):

	December 31, 2021			December 31, 2020
Lease liabilities	$	4,023		$	4,940
Right-of-use assets	$	3,939		$	4,878
Weighted average remaining lease term (in years)		6.92			7.33
Weighted average discount rate		3.09	%		3.03	%

	Year Ended December 31, 2021		Year Ended December 31, 2020		Year Ended December 31, 2019
Lease cost
Operating lease cost	$	1,069	$	993	$	1,040
Short-term lease cost		—		3		3
Total lease cost	$	1,069	$	996	$	1,043
Cash paid for amounts included in the measurement of lease liabilities	$	1,047	$	959	$	1,013

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows (dollars in thousands):

Lease payments due	As of December 31, 2021
2022	$	1,043
2023		944
2024		514
2025		471
2026		260
2027 and after		1,289
Total undiscounted cash flows	$	4,521
Discount		(498	)
Lease liabilities	$	4,023

Lease expense, a component of occupancy and equipment expense, for the years ended December 31, 2021, 2020, and 2019 totaled $1,257,000, $1,158,000, and $1,187,000, respectively. The amounts recognized in lease expense include insurance, property taxes, and common area maintenance.