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LEASES

6 Months Ended

Jun. 30, 2022

NOTE 11. LEASES

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Most of our leases are for branches, ATM locations, and office space and have terms extending through 2040. All leases are classified as operating leases, and are recognized on the consolidated balance sheets as a right- of-use (“ROU”) asset with a corresponding lease liability.

The following table presents the consolidated statements of condition classification of the ROU assets and lease liabilities:


(in thousands)	Classification	June 30, 2022		December 31, 2021
Lease Right-of-Use Assets
Operating lease right-of-use assets	Other assets	$	8,681	$	9,274

Lease Liabilities
Operating lease liabilities	Other liabilities		9,080		9,643

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. The lease agreements often include one or more options to renew at our discretion. If at lease inception, we consider the exercising of a renewal option to be reasonably certain, we will include the extended term in the calculation of the ROU asset and lease liability.

The following table presents the weighted average lease term and discount rate of the leases:


	June 30, 2022		December 31, 2021
Weighted-average remaining lease term (in years)
Operating leases	7.61		8.03

Weighted-average discount rate
Operating leases	3.09	%	3.07	%

The following table represents lease costs and other lease information. As we have elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as real estate taxes, common area maintenance and utilities.


	Three Months Ended				Six Months Ended
(in thousands)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Lease Costs
Operating lease cost	$	335	$	322	$	656	$	642
Variable lease cost		62		55		274		136
Total lease cost	$	397	$	377	$	930	$	778

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2022 are, as follows:


(in thousands)	Payments
Twelve Months Ended:
June 30, 2023	$	1,345
June 30, 2024		1,353
June 30, 2025		1,186
June 30, 2026		1,073
June 30, 2027		913
Thereafter		3,618
Total future minimum lease payments		9,488
Amounts representing interest		(408)
Present value of net future minimum lease payments	$	9,080