Leases

12 Months Ended

Dec. 31, 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. This resulted in a $2.6 million right-of-use asset and $3.7 million lease liability, which was recorded in October 2022. The Corporation received a $1.1 million tenant improvement allowance related to this lease, which was recognized as a lease incentive and deducted from the right-of-use asset.

The components of total lease expense were as follows:


	For the Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Operating lease cost	$	1,411	$	1,544	$	1,513
Short-term lease cost	200		148		158
Variable lease cost	576		604		492
Less: sublease income	(75)		(179)		(170)
Total lease cost, net	$	2,112	$	2,117	$	1,993

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


	December 31, 2023		December 31, 2022		December 31, 2021
Weighted-average remaining lease term (in years)	7.70		8.06		5.05
Weighted-average discount rate	3.61	%	3.40	%	2.51	%

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


(In Thousands)
2024	$	1,514
2025	1,408
2026	1,400
2027	1,427
2028	1,113
Thereafter	3,600
Total undiscounted cash flows	10,462
Discount on cash flows	(1,508)
Total lease liability	$	8,954