As of March 31, 2025, substantially all the Company's leases are operating leases for real estate property for bank branches, ATM locations, and office space.

For leases in effect at January 1, 2019 and for leases commencing thereafter, the Company recognizes a lease liability and a right-of-use asset, based on the present value of lease payments over the lease term. The discount rate used in determining present value was the Company's incremental borrowing rate which is the FHLB fixed advance rate based on the remaining lease term as of January 1, 2019, or the commencement date for leases subsequently entered into. The Company has elected to not include short-term leases (i.e. leases with terms of twelve months or less) or leases (primarily copiers) deemed immaterial, on the consolidated balance sheets.

The following table contains supplemental balance sheet information related to leases (dollars in thousands):


	March 31, 2025			March 31, 2024			December 31, 2024
Operating lease right-of-use assets	$	13,817		$	14,318		$	13,861
Operating lease liabilities		14,255			14,624			14,190
Weighted-average remaining lease term (in years)		4.8			4.8		4.7
Weighted-average discount rate		3.46	%		3.22	%		3.22	%

Certain of the Company's leases contain options to renew the lease; however, not all renewal options are included in the calculation of lease liabilities as they are not reasonably certain to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments. The Company does not have any other material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations.

Maturities of lease liabilities are as follows (in thousands):


Year ending December 31,
2025	$	2,385
2026		3,070
2027		2,842
2028		2,187
2029		1,718
Thereafter		3,684
Total lease payments		15,886
Less imputed interest		(1,631	)
Total lease liability	$	14,255

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):


	Three months ended
	March 31,
	2025			2024
Operating lease cost	$	826		$	846
Short-term lease cost		31			35
Variable lease cost		343			138
Total lease cost		1,200			1,019
Income from subleases		(80	)		(104	)
Net lease cost	$	1,120		$	915

As the Company elected not to separate lease and non-lease components, the variable lease cost primarily represents variable payment such as common area maintenance and copier expense. The Company does not have any material sub-lease agreements. Cash paid for amounts included in the measurement of lease liabilities was (in thousands):


	March 31, 2025		March 31, 2024
Operating cash flows from operating leases	$	822	$	836

Note 8 -- Leases