LEASES

12 Months Ended

Dec. 31, 2023

The Corporation enters into noncancellable lease arrangements primarily for some of its community banking offices. Certain lease arrangements contain clauses requiring increasing rental payments over the lease term, which are generally contractually stipulated. Many of these lease arrangements provide the Corporation with the option to renew the lease arrangement after the initial lease term. These options are included in determining the lease term used to establish the right-of-use assets and lease liabilities, when it is reasonably certain the Corporation will exercise its renewal option. As most of the Corporation’s leases do not have a readily determinable implicit rate, the incremental borrowing rate is primarily used to determine the discount rate for purposes of measuring the right-of-use assets and lease liabilities. The Corporation’s lease arrangements do not contain any material residual value guarantees or material restrictive covenants.

The following ROU assets and lease liabilities are reported within the Consolidated Statements of Condition as follows:


(In thousands)	December 31, 2023			December 31, 2022
Operating Leases:
ROU assets	$	2,615		$	3,162
Lease liabilities	2,615			3,162
Weighted average remaining lease term	4.7 years			5.0 years
Weighted average discount rate	5.61		%	5.42		%

Supplemental cash flow information related to operating leases for the years ended December 31:


(In thousands)	2023		2022
Operating cash flows from operating leases	$	924	$	964

As of December 31, 2023, the Corporation did not have any significant additional operating or finance leases that had not yet commenced.

The following summarizes the remaining scheduled future minimum lease payments for operating leases as of December 31, 2023:


Year	(In thousands)
2024	$	827
2025	785
2026	632
2027	428
2028	393
Thereafter	367
Total minimum lease payments	3,432
Less: amount representing interest (1)	817
Present value of net minimum lease payments	$	2,615

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(1) Amount necessary to reduce net minimum lease payments to present value calculated at the Corporation’s incremental borrowing rate.