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Leases

12 Months Ended

Dec. 31, 2024

NOTE 9: Leases

The Corporation’s leases comprise primarily of leases of real estate in which the Corporation is the lessee. Lease cost for the years ended December 31, 2024, 2023 and 2022 is as follows:


	Year Ended December 31,
(Dollars in thousands)	2024		2023		2022
Operating lease cost	$	821	$	872	$	1,008
Finance lease cost:
Amortization of right-of-use asset		452		314		314
Interest on lease liability		220		121		125
Short-term lease cost		89		99		139
Variable lease cost		121		63		97
Total lease cost	$	1,703	$	1,469	$	1,683

Interest on lease liability cost is included in “Interest expense – Borrowings” and all other lease costs are included in “Occupancy” on the Consolidated Statements of Income. Variable lease payments primarily represent payments for common area maintenance, taxes and fees that are not included in base rent payments, and changes in lease payments that are adjusted for inflation.

Certain of the Corporation’s leases contain options to extend the lease term beyond the initial term. Options to extend the lease term are recognized as part of the Corporation’s lease liabilities and right-of-use assets at the commencement of a lease to the extent the Corporation is reasonably certain to exercise such options.

The Corporation’s right-of-use assets, lease liabilities, weighted average remaining lease term and weighted average discount rate of the Corporation’s leases are set forth in the table below.


		December 31,			December 31,
(Dollars in thousands)		2024			2023
Operating leases:
Right of use assets	$	2,237		$	2,836
Lease liabilities	$	2,260		$	2,877
Weighted average remaining lease term (years)		8.5			8.0
Weighted average discount rate		3.0	%		2.7	%

Finance leases:
Right of use assets	$	7,316		$	5,251
Lease liabilities	$	8,169		$	5,921
Weighted average remaining lease term (years)		15.5			16.5
Weighted average discount rate		3.0	%		2.0	%

Right of use assets are included in “Other Assets” on the Consolidated Balance Sheets. Operating lease liabilities are included in “Other Liabilities” and Finance lease liabilities are included in “Long-term Borrowings” in the Consolidated Balance Sheets. During the years ended December 31, 2024, 2023 and 2022, the Corporation assumed lease liabilities to obtain right-of-use assets in operating leases and financing leases of $2.73 million, $775,000 and $888,000, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2024, 2023 and 2022 is set forth in the table below. In addition to the amounts paid shown below, the Corporation received lease incentives of $42,000 related to finance leases during the year ended December 31, 2024 and $37,000 related to operating leases during the year ended December 31, 2022.


	Year Ended December 31,
(Dollars in thousands)	2024		2023		2022
Operating leases:
Operating cash flows	$	832	$	905	$	1,823
Finance leases:
Operating cash flows		220		121		125
Financing cash flows		233		220		440
Total cash flows	$	1,285	$	1,246	$	2,388

Maturities of the Corporation’s lease liabilities are as follows:


	December 31, 2024
(Dollars in thousands)	Operating Leases		Finance Leases
2025	$	540	$	512
2026		451		574
2027		220		586
2028		179		602
2029		159		618
Thereafter		1,029		7,360
Total		2,578		10,252
Imputed interest		(318)		(2,083)
Lease liabilities	$	2,260	$	8,169