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RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 6 Months Ended
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Jun. 30, 2023
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 8. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES ​ The Company records as operating lease liabilities the present value of its required minimum lease payments plus any amounts probable of being owed under a residual value guarantee. Offsetting these operating lease liabilities, the Company records right-of-use assets for the underlying leased property. ​ As of June 30, 2023, the Company was under 45 separate and distinct operating lease contracts to lease the land and/or buildings for 38 of its offices, with 12 such operating leases contracted with a related party of the Company. As of June 30, 2023, payments on 22 of the Company’s operating leases were considered variable because such payments were adjustable based on periodic changes in the Consumer Price Index. ​ The Company recorded a renewal to one of its third-party leases during the first six months of 2023 with a total right-of-use asset value of $1.1 million and recorded two new third-party leases during the first six months of 2023 with a total right-of-use asset value of $278,000. ​ The following table presents information concerning the Company’s operating lease expense recorded as a noninterest expense within the “Occupancy” category for the three and six months ended June 30, 2023 and 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended | ​ | ​ | Six Months Ended
​ |  | June 30, | ​ | ​ | June 30,
(dollars in thousands) |  | 2023 | ​ | 2022 |  | ​ | 2023 | ​ | ​ | 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease expense: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Related Party: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Variable lease expense | ​ | $ | 1,205 |  | $ | 1,269 | ​ | ​ | $ | 2,429 |  | ​ | $ | 2,535
Fixed lease expense |  | ​ | 58 | ​ | ​ | 57 | ​ | ​ | ​ | 117 | ​ | ​ | ​ | 92
Third-Party: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Variable lease expense | ​ | ​ | 369 | ​ | ​ | 220 | ​ | ​ | ​ | 680 | ​ | ​ | ​ | 417
Fixed lease expense | ​ | ​ | 386 | ​ | ​ | 349 | ​ | ​ | ​ | 775 | ​ | ​ | ​ | 693
Total operating lease expense | ​ | $ | 2,018 |  | $ | 1,895 | ​ | ​ | $ | 4,001 |  | ​ | $ | 3,737
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other information concerning operating leases: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash paid for amounts included in the measurement of operating lease liabilities | ​ | $ | 1,771 | ​ | $ | 1,705 | ​ | ​ | $ | 3,500 | ​ | ​ | $ | 3,412
Cash paid for variable rent payments not included in measurement of operating lease liabilities | ​ | ​ | 151 | ​ | ​ | 151 | ​ | ​ | ​ | 302 | ​ | ​ | ​ | 302
Short-term lease payments not included in the measurement of lease liabilities | ​ | ​ | — | ​ | ​ | — | ​ | ​ | ​ | — | ​ | ​ | ​ | —
​ The following table presents the weighted average remaining term and weighted average discount rate for the Company’s non-short-term operating leases as of June 30, 2023 and December 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2023 | ​ | December 31, 2022 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average remaining term in years | ​ | ​ | 7.96 | ​ | ​ | 8.44 | ​
Weighted average discount rate | ​ |  | 2.13 | % |  | 2.10 | %
​ The following table presents a maturity schedule of the Company’s operating lease liabilities based on undiscounted cash flows, and a reconciliation of those undiscounted cash flows to the operating lease liabilities recognized on the Company’s balance sheet as of June 30, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year (in thousands) |  | Related Party |  | Third-Party |  | Total |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2023 |  | $ | 1,923 |  | $ | 1,322 |  | $ | 3,245 | ​
2024 |  | ​ | 3,726 |  | ​ | 2,447 |  | ​ | 6,173 | ​
2025 |  | ​ | 3,570 |  | ​ | 1,842 |  | ​ | 5,412 | ​
2026 |  | ​ | 3,640 |  | ​ | 1,491 |  | ​ | 5,131 | ​
2027 |  | ​ | 3,680 |  | ​ | 1,160 |  | ​ | 4,840 | ​
Thereafter |  | ​ | 11,751 |  | ​ | 3,630 |  | ​ | 15,381 | ​
Total undiscounted cash flows | ​ | $ | 28,290 | ​ | $ | 11,892 | ​ | $ | 40,182 | ​
Discount applied to cash flows | ​ | ​ | (3,035) | ​ | ​ | (1,426) | ​ | ​ | (4,461) | ​
Total discounted cash flows reported as operating lease liabilities | ​ | $ | 25,255 | ​ | $ | 10,466 | ​ | $ | 35,721 | ​
​

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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