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LEASES

9 Months Ended

Sep. 30, 2022

NOTE 9 – LEASES

The Company leases 19 branches under noncancelable operating leases. These leases expire on various dates through 2030. The Company’s leases often have an option to renew one or more times, at the Company’s discretion, following the expiration of the initial term. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability.

The Company uses the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

The below maturity schedule represents the undiscounted lease payments for the five-year period and thereafter as of September 30, 2022:


For remainder of 2022	$	3,895
2023		3,888
2024		3,669
2025		2,803
2026		2,065
Thereafter		4,991
Total undiscounted cash flows		21,311
Less: interest		(4,900)
Present value of lease payments	$	16,411

The following table presents the weighted average lease term and discount rate at the date indicated:


	September 30, 2022
Weighted-average remaining lease term	5.5	years
Weighted-average discount rate	3.10	%

Rental expense included in occupancy and equipment expense totaled $934,000 and $3.2 million for the three and nine months ended September 30, 2022 and $906,000 and $2.6 million for the three and nine months ended September 30, 2021, respectively.