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LEASES

6 Months Ended

Jun. 30, 2024

NOTE 7 – LEASES

The Company leased 20 branches under noncancelable operating leases as of June 30, 2024. 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 discount 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 June 30, 2024:


For remainder of 2024	$	1,956
2025		3,503
2026		2,820
2027		2,393
2028		2,238
Thereafter		2,111
Total undiscounted cash flows		15,021
Less: interest		(1,242)
Present value of lease payments	$	13,779

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


	June 30, 2024		December 31, 2023
Weighted-average remaining lease term	4.6	years	4.8	years
Weighted-average discount rate	3.7	%	3.4	%

Rental expense included in occupancy and equipment expense totaled $1.0 million and $2.0 million for both the three and six months ended June 30, 2024 and the three and six months ended June 30, 2023, respectively.

The following table presents certain information related to the operating lease costs included in occupancy and equipment expense on the consolidated statements of income for the periods indicated:


	Three months ended				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating lease cost	$	5,035	$	4,997	$	6,989	$	6,948
Short-term lease cost		—		21		15		64
Less: Sublease income		(22)		(19)		(34)		(41)
Total operating lease cost, net	$	5,013	$	4,999	$	6,970	$	6,971