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OPERATING LEASES
 9 Months Ended
Sep. 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 September 30,Nine Months Ended September 30,
(dollars in thousands)2024202320242023
Lease cost:
Operating lease cost$1,605 $1,285 $4,345 $3,937 
Variable lease cost484 918 2,346 2,740 
Less: Sublease income— — — (34)
Total lease cost$2,089 $2,203 $6,691 $6,643 
Other information:
Operating cash flows from operating leases$(1,564)$(1,258)$(4,246)$(3,950)
Weighted-average remaining lease term - operating leases 10.53 years10.85 years10.53 years10.85 years
Weighted-average discount rate - operating leases4.04 %3.96 %4.04 %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 September 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years and all years thereafter:

(dollars in thousands)Undiscounted Cash FlowsLease Liability Discount on Cash FlowsLease Liability
Year Ending December 31,
2024 (remainder)$1,297 $319 $978 
20255,166 1,180 3,986 
20265,125 1,032 4,093 
20274,333 891 3,442 
20283,486 776 2,710 
20293,083 677 2,406 
Thereafter19,201 3,009 16,192 
Total $41,691 $7,884 $33,807 

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 September 30,Nine Months Ended September 30,
(dollars in thousands)2024202320242023
Total rental income recognized$519 $497 $1,539 $1,622 
The following table presents estimated lease payments, based on the Company's leases as lessor as of September 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)$315 
20251,207 
20261,074 
20271,017 
2028608 
2029553 
Thereafter1,294 
Total $6,068 
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 September 30,Nine Months Ended September 30,
(dollars in thousands)2024202320242023
Lease cost:
Operating lease cost$1,605 $1,285 $4,345 $3,937 
Variable lease cost484 918 2,346 2,740 
Less: Sublease income— — — (34)
Total lease cost$2,089 $2,203 $6,691 $6,643 
Other information:
Operating cash flows from operating leases$(1,564)$(1,258)$(4,246)$(3,950)
Weighted-average remaining lease term - operating leases 10.53 years10.85 years10.53 years10.85 years
Weighted-average discount rate - operating leases4.04 %3.96 %4.04 %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 September 30, 2024, for the remainder of fiscal year 2024, the next five succeeding fiscal years and all years thereafter:

(dollars in thousands)Undiscounted Cash FlowsLease Liability Discount on Cash FlowsLease Liability
Year Ending December 31,
2024 (remainder)$1,297 $319 $978 
20255,166 1,180 3,986 
20265,125 1,032 4,093 
20274,333 891 3,442 
20283,486 776 2,710 
20293,083 677 2,406 
Thereafter19,201 3,009 16,192 
Total $41,691 $7,884 $33,807 

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 September 30,Nine Months Ended September 30,
(dollars in thousands)2024202320242023
Total rental income recognized$519 $497 $1,539 $1,622 
The following table presents estimated lease payments, based on the Company's leases as lessor as of September 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)$315 
20251,207 
20261,074 
20271,017 
2028608 
2029553 
Thereafter1,294 
Total $6,068