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OPERATING LEASES | 6 Months Ended
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Jun. 30, 2024
Leases [Abstract] |
LEASES | 12. OPERATING LEASES The Company leases certain land and buildings for its bank branches and ATMs. In some instances, a lease may contain renewal options to extend the term of the lease. Renewal options that are likely to be exercised have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases and we do not include any short-term leases in the calculation of the right-of-use assets and lease liabilities. The most significant assumption related to the Company’s application of ASC 842 was the discount rate assumption. As most of the Company’s lease agreements do not provide for an implicit interest rate, the Company uses the collateralized interest rate that the Company would have to pay to borrow over a similar term to estimate the Company’s lease liabilities. The following table presents total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate for the periods presented:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(dollars in thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,437 |  |  | $ | 1,327 |  |  | $ | 2,740 |  |  | $ | 2,652 |
Variable lease cost | 927 |  |  | 934 |  |  | 1,862 |  |  | 1,822 |
Less: Sublease income | — |  |  | (17) |  |  | — |  |  | (34) |
Total lease cost | $ | 2,364 |  |  | $ | 2,244 |  |  | $ | 4,602 |  |  | $ | 4,440 |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,425) |  |  | $ | (1,302) |  |  | $ | (2,682) |  |  | $ | (2,692) |
Weighted-average remaining lease term - operating leases | 10.87 years |  | 10.98 years |  | 10.87 years |  | 10.98 years
Weighted-average discount rate - operating leases | 4.09 | % |  | 3.96 | % |  | 4.09 | % |  | 3.96 | %
The following table presents a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities as of June 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Discount on Cash Flows |  | Lease Liability
Year Ending December 31, |  |  |
2024 (remainder) |  | $ | 2,443 |  |  | $ | 644 |  |  | $ | 1,799 |
2025 |  | 4,499 |  |  | 1,179 |  |  | 3,320 |
2026 |  | 4,441 |  |  | 1,050 |  |  | 3,391 |
2027 |  | 4,428 |  |  | 915 |  |  | 3,513 |
2028 |  | 3,611 |  |  | 794 |  |  | 2,817 |
2029 |  | 3,144 |  |  | 688 |  |  | 2,456 |
Thereafter |  | 18,965 |  |  | 2,839 |  |  | 16,126 |
Total |  | $ | 41,531 |  |  | $ | 8,109 |  |  | $ | 33,422 |
In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following table presents lease income related to these leases that was recognized for the periods presented:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(dollars in thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Total rental income recognized | $ | 511 |  |  | $ | 563 |  |  | $ | 1,020 |  |  | $ | 1,125 |
The following table presents estimated lease payments, based on the Company's leases as lessor as of June 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years, and all years thereafter:
(dollars in thousands) |
Year Ending December 31, |
2024 (remainder) | $ | 644 |
2025 | 1,157 |
2026 | 1,015 |
2027 | 960 |
2028 | 608 |
2029 | 553 |
Thereafter | 1,293 |
Total | $ | 6,230 |
LEASES | 12. OPERATING LEASES The Company leases certain land and buildings for its bank branches and ATMs. In some instances, a lease may contain renewal options to extend the term of the lease. Renewal options that are likely to be exercised have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases and we do not include any short-term leases in the calculation of the right-of-use assets and lease liabilities. The most significant assumption related to the Company’s application of ASC 842 was the discount rate assumption. As most of the Company’s lease agreements do not provide for an implicit interest rate, the Company uses the collateralized interest rate that the Company would have to pay to borrow over a similar term to estimate the Company’s lease liabilities. The following table presents total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate for the periods presented:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(dollars in thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,437 |  |  | $ | 1,327 |  |  | $ | 2,740 |  |  | $ | 2,652 |
Variable lease cost | 927 |  |  | 934 |  |  | 1,862 |  |  | 1,822 |
Less: Sublease income | — |  |  | (17) |  |  | — |  |  | (34) |
Total lease cost | $ | 2,364 |  |  | $ | 2,244 |  |  | $ | 4,602 |  |  | $ | 4,440 |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,425) |  |  | $ | (1,302) |  |  | $ | (2,682) |  |  | $ | (2,692) |
Weighted-average remaining lease term - operating leases | 10.87 years |  | 10.98 years |  | 10.87 years |  | 10.98 years
Weighted-average discount rate - operating leases | 4.09 | % |  | 3.96 | % |  | 4.09 | % |  | 3.96 | %
The following table presents a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities as of June 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Discount on Cash Flows |  | Lease Liability
Year Ending December 31, |  |  |
2024 (remainder) |  | $ | 2,443 |  |  | $ | 644 |  |  | $ | 1,799 |
2025 |  | 4,499 |  |  | 1,179 |  |  | 3,320 |
2026 |  | 4,441 |  |  | 1,050 |  |  | 3,391 |
2027 |  | 4,428 |  |  | 915 |  |  | 3,513 |
2028 |  | 3,611 |  |  | 794 |  |  | 2,817 |
2029 |  | 3,144 |  |  | 688 |  |  | 2,456 |
Thereafter |  | 18,965 |  |  | 2,839 |  |  | 16,126 |
Total |  | $ | 41,531 |  |  | $ | 8,109 |  |  | $ | 33,422 |
In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following table presents lease income related to these leases that was recognized for the periods presented:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(dollars in thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Total rental income recognized | $ | 511 |  |  | $ | 563 |  |  | $ | 1,020 |  |  | $ | 1,125 |
The following table presents estimated lease payments, based on the Company's leases as lessor as of June 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years, and all years thereafter:
(dollars in thousands) |
Year Ending December 31, |
2024 (remainder) | $ | 644 |
2025 | 1,157 |
2026 | 1,015 |
2027 | 960 |
2028 | 608 |
2029 | 553 |
Thereafter | 1,293 |
Total | $ | 6,230 |

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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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- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-30/tableOfContent + Details
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