Leases

3 Months Ended

Mar. 31, 2022

Leases

The Corporation leases various office spaces and specialized lending production offices under non-cancellable operating leases which expire on various dates through 2033. The Corporation also leases office equipment. The Corporation recognizes a right-of-use asset and an operating lease liability for all leases, with the exception of short-term leases. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. During 2022, the Corporation entered into a new lease in the Southeast Wisconsin market resulting in a $1.6 million right-of-use asset. In addition, the Corporation received a $991,000 tenant improvement allowance which is recognized as a lease incentive and deducted from the right-of-use asset.

In 2019, the Corporation entered into a sublease for office space it vacated in its Kansas City metropolitan area which expires in 2023. During the first quarter 2022, the Corporation amended the sublease agreement, the amendment did not result in any impairment.

The components of total lease expense were as follows:


	For the Three Months Ended March 31,
	2022		2021
	(In Thousands)
Operating lease cost	$	383	$	375
Short-term lease cost	37		39
Variable lease cost	126		129
Less: sublease income	(45)		(39)
Total lease cost, net	$	501	$	504

Quantitative information regarding the Corporation’s operating leases was as follows:


	March 31, 2022		December 31, 2021
Weighted-average remaining lease term (in years)	6.80		5.05
Weighted-average discount rate	2.68	%	2.51	%

The following maturity analysis shows the undiscounted cash flows due on the Corporation’s operating lease liabilities:


(In Thousands)
2022	$	1,241
2023	1,248
2024	1,073
2025	949
2026	935
Thereafter	3,003
Total undiscounted cash flows	8,449
Discount on cash flows	(869)
Total lease liability	$	7,580