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PREMISES AND EQUIPMENT

9 Months Ended

Sep. 30, 2022

PREMISES AND EQUIPMENT

Premises and Equipment

NOTE 9: PREMISES AND EQUIPMENT

Major classifications of premises and equipment, stated at cost, were as follows:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
​		2022			2021
​	​	(In Thousands)
Land		$	39,615	​	$	39,440
Buildings and improvements	​		104,023	​		101,207
Furniture, fixtures and equipment	​		65,175	​		57,982
Operating leases right of use asset	​		7,645	​		7,715
	​		216,458	​		206,344
Less: accumulated depreciation	​		77,048	​		73,611
	​	$	139,410	​	$	132,733

​

Leases. The Company adopted ASU 2016 02, Leases (Topic 842), on January 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million as of January 1, 2019. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of September 30, 2022, the lease right of use asset value was $7.6 million and the corresponding lease liability was $7.8 million. As of December 31, 2021, the lease right of use asset value was $7.7 million and the corresponding lease liability was $7.9 million. At September 30, 2022, expected lease terms ranged from 0.5 years to 16.2 years with a weighted-average lease term of 8.4 years. The weighted-average discount rate at September 30, 2022 was 3.42%.

For the three months ended September 30, 2022 and 2021, lease expense was $408,000 and $386,000, respectively. For each of the nine months ended September 30, 2022 and 2021, lease expense was $1.2 million. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three months ended September 30, 2022 and 2021 was $80,000 and $79,000, respectively. The total lease expense related to ATMs for the nine months ended September 30, 2022 and 2021 was $228,000 and $230,000, respectively.

​

The Company does not sublease any of its leased facilities; however, it does lease to other parties portions of facilities that it owns. In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases. In the three months ended September 30, 2022 and 2021, income recognized from these lease agreements was $300,000 and $323,000, respectively, and was included in occupancy and equipment expense. In the nine months ended September 30, 2022 and 2021, income recognized from these lease agreements was $890,000 and $903,000, respectively, and was included in occupancy and equipment expense.

​

​	​	​	​	​	​	​
​		September 30, 2022			December 31, 2021
​	​	(In Thousands)
Statement of Financial Condition	​	​	​		​	​
Operating leases right of use asset	​	$	7,645	​	$	7,715
Operating leases liability	​	$	7,839	​	$	7,886
​	​	​	​	​	​	​
​		For the Three Months Ended
​	​	September 30, 2022			September 30, 2021
​	​	(In Thousands)
Statement of Income	​	​	​	​	​	​
Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset)	​	$	408	​	$	386
​	​	​	​	​	​	​
Supplemental Cash Flow Information	​	​	​	​		​
Cash paid for amounts included in the measurement of lease liabilities:	​	​	​	​		​
Operating cash flows from operating leases	​	$	400	​	$	375
Right of use assets obtained in exchange for lease obligations:	​	​	​	​		​
Operating leases	​		618	​	​	74

​

​	​	​	​	​	​	​
​	​	For the Nine Months Ended
​		September 30, 2022			September 30, 2021
​	​	(In Thousands)
Statement of Income	​		​	​		​
Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset)	​	$	1,166	​	$	1,153
​	​	​	​	​	​	​
Supplemental Cash Flow Information	​		​	​		​
Cash paid for amounts included in the measurement of lease liabilities:	​		​	​		​
Operating cash flows from operating leases	​	$	1,141	​	$	1,117
Right of use assets obtained in exchange for lease obligations:	​		​	​		​
Operating leases	​	​	618	​	​	74

​

At September 30, 2022, future expected lease payments for leases with terms exceeding one year were as follows (In Thousands):

​

​	​	​	​
2022		$	303
2023	​		1,199
2024	​		1,146
2025	​		1,126
2026	​		1,063
2027	​	​	987
Thereafter	​		3,206
​	​	​	​
Future lease payments expected	​		9,030
​	​	​	​
Less: interest portion of lease payments	​		(1,191)
​	​	​	​
Lease liability	​	$	7,839

​

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- References

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- Definition

The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 958
-SubTopic 360
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126982197&loc=d3e99893-112916

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-URI https://asc.fasb.org/topic&trid=2155823

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 958
-SubTopic 360
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=126982197&loc=SL120174063-112916

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 958
-SubTopic 360
-Section 50
-Paragraph 1
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126982197&loc=d3e99779-112916

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