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LEASES

9 Months Ended

Sep. 30, 2023

NOTE 8 – LEASES

The Company leased 20 branches under noncancelable operating leases as of September 30, 2023. 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, 2023:


For remainder of 2023	$	1,041
2024		4,222
2025		3,416
2026		2,670
2027		2,191
Thereafter		3,964
Total undiscounted cash flows		17,504
Less: interest		(1,487)
Present value of lease payments	$	16,017

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


	September 30, 2023		September 30, 2022
Weighted-average remaining lease term	5.0	years	5.5	years
Weighted-average discount rate	3.4	%	3.1	%

Rental expense included in occupancy and equipment expense totaled $1.0 million and $3.0 million for the three and nine months ended September 30, 2023 and $934,000 and $3.2 million for the three and nine months ended September 30, 2022, respectively.