Leases

9 Months Ended

Sep. 30, 2023

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.

In June 2023, the Corporation relocated its Kansas City metropolitan area office resulting in a $2.6 million right-of-use asset and $3.7 million lease liability. The Corporation received a $1.1 million tenant improvement allowance related to this lease, which is recognized as a lease incentive and deducted from the right-of-use asset.

The components of total lease expense were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
	(In Thousands)
Operating lease cost	$	338	$	382	$	1,088	$	1,147
Short-term lease cost	36		38		145		112
Variable lease cost	139		142		436		408
Less: sublease income	—		(45)		(75)		(134)
Total lease cost, net	$	513	$	517	$	1,594	$	1,533

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


	September 30, 2023		December 31, 2022
Weighted-average remaining lease term (in years)	7.89		8.06
Weighted-average discount rate	3.56	%	3.40	%

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


(In Thousands)
2023	$	374
2024	1,527
2025	1,408
2026	1,400
2027	1,428
Thereafter	4,688
Total undiscounted cash flows	10,825
Discount on cash flows	(1,589)
Total lease liability	$	9,236