PREMISES AND EQUIPMENT

6 Months Ended

Jun. 30, 2024

PREMISES AND EQUIPMENT

PREMISES AND EQUIPMENT

NOTE 9: PREMISES AND EQUIPMENT

Major classifications of premises and equipment, stated at cost, were as follows:

	June 30,		December 31,
	2024		2023
	(In Thousands)
Land	$	39,305	$	39,617
Buildings and improvements		107,213		107,602
Furniture, fixtures and equipment		69,093		70,162
Operating leases right of use asset		6,907		6,621
		222,518		224,002
Less: accumulated depreciation		87,991		85,411
	$	134,527	$	138,591

Leases. In 2019, the Company adopted ASU 2016-02, Leases (Topic 842). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of June 30, 2024, the lease right of use asset value was $6.9 million and the corresponding lease liability was $7.1 million. As of December 31, 2023, the lease right of use asset value was $6.6 million and the corresponding lease liability was $6.9 million. At June 30, 2024, expected lease terms ranged from 3.1 years to 14.4 years with a weighted-average lease term of 7.2 years. The weighted-average discount rate at June 30, 2024 was 4.02%.

For the three months ended June 30, 2024 and 2023, lease expense was $413,000 and $433,000, respectively. For the six months ended June 30, 2024 and 2023, lease expense was $895,000 and $843,000, respectively. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material. The total lease expense related to ATMs for the three months ended June 30, 2024 and 2023 was $90,000 and $78,000, respectively. The total lease expense related to ATMs for the six months ended June 30, 2024 and 2023 was $171,000 and $150,000, respectively.

The Company does not sublease any of its leased facilities; however, it does lease to other parties portions of facilities that it owns. In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases. In the three months ended June 30, 2024 and 2023, income recognized from these lease agreements was $339,000 and $325,000, respectively, and was included in occupancy and equipment expense. In the six months ended June 30, 2024 and 2023, income recognized from these lease agreements was $680,000 and $649,000, respectively, and was included in occupancy and equipment expense.

	June 30, 2024		December 31, 2023
	(In Thousands)
Statement of Financial Condition
Operating leases right of use asset	$	6,907	$	6,621
Operating leases liability	$	7,131	$	6,870
	For the Three Months Ended
	June 30, 2024		June 30, 2023
	(In Thousands)
Statement of Income
Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset)	$	413	$	433
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	407	$	403
Right of use assets obtained in exchange for lease obligations:
Operating leases		339		—

	For the Six Months Ended
	June 30, 2024		June 30, 2023
	(In Thousands)
Statement of Income
Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset)	$	895	$	843
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	869	$	795
Right of use assets obtained in exchange for lease obligations:
Operating leases		680		296

At June 30, 2024, future expected lease payments for leases with terms exceeding one year were as follows (In Thousands):

2024	$	688
2025		1,313
2026		1,338
2027		1,289
2028		1,019
2029		663
Thereafter		1,989
Future lease payments expected		8,299
Less: interest portion of lease payments		(1,168)
Lease liability	$	7,131