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Note 24 - Leases

9 Months Ended

Sep. 30, 2023

(24)

Leases

Bancorp has operating leases for various locations with terms ranging from approximately six months to 17 years, several of which include options to extend the leases in five-year increments. A total of four operating leases were added as a result of the CB acquisition in 2022. Options reasonably expected to be exercised are included in determination of the right-of-use asset. Bancorp elected to use a practical expedient to expense short-term lease obligations associated with leases with original terms of 12 months or less. Bancorp elected not to separate non-lease components from lease components for its operating leases. The right-of-use lease asset and operating lease liability are recorded in premises and equipment and other liabilities on the consolidated balance sheet.

Balance sheet, income statement and cash flow detail regarding operating leases follows:

(dollars in thousands)	September 30, 2023			December 31, 2022

Balance Sheet
Operating lease right-of-use asset	$	17,720		$	19,694
Operating lease liability		18,947			21,008

Weighted average remaining lease term (years)		9.3			9.0
Weighted average discount rate		2.70	%		2.57	%

Maturities of lease liabilities:
One year or less	$	872		$	3,453
Year two		3,345			3,293
Year three		2,676			2,739
Year four		2,168			2,339
Year five		2,018			2,245
Greater than five years		10,496			9,559
Total lease payments	$	21,575		$	23,628
Less imputed interest		2,628			2,620
Total	$	18,947		$	21,008

	Three months ended		Three months ended
(in thousands)	September 30, 2023		September 30, 2022
Income Statement
Components of lease expense:
Operating lease cost	$	815	$	793
Variable lease cost		96		57
Less sublease income		25		24
Total lease cost	$	886	$	826

	Nine months ended		Nine months ended
(in thousands)	September 30, 2023		September 30, 2022
Income Statement
Components of lease expense:
Operating lease cost	$	2,492	$	2,241
Variable lease cost		235		172
Less sublease income		75		72
Total lease cost	$	2,652	$	2,341

	Nine months ended		Nine months ended
(in thousands)	September 30, 2023		September 30, 2022
Cash flow Statement
Supplemental cash flow information:
Operating cash flows from operating leases	$	3,111	$	2,746

As of September 30, 2023, Bancorp had entered into one lease agreement that had yet to commence.