Leases

9 Months Ended

Sep. 30, 2024

The Company's leases primarily consist of office space and bank branches with remaining lease terms of generally 1 to 10 years. As of September 30, 2024, operating right of use (ROU) assets and liabilities were $1.7 million and $1.8 million, respectively. As of September 30, 2024, the weighted-average remaining lease term on these operating leases was approximately 5.9 years and the weighted-average discount rate used to measure the lease liabilities was approximately 4.1%.

Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities. Currently, the Company does not have any finance leases. The ROU assets are included in premises and equipment, net on the consolidated balance sheets.

Operating lease ROU assets represent the Company's right to use an underlying asset during the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company's incremental borrowing rate at the lease commencement date.

Operating lease cost, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the consolidated statements of income. The operating lease cost was $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, compared to $0.1 million and $0.3 million for the three and nine months ended September 30, 2023, respectively.

The table below summarizes the maturity of remaining operating lease liabilities:


Lease payments due in:	Operating Lease
(dollars in thousands)
2024 remaining	$	97
2025	391
2026	400
2027	327
2028	330


Thereafter	438
Total lease payments	$	1,983
Less imputed interest	(225)
Total lease liabilities, as reported	$	1,758