Leases

6 Months Ended

Jun. 30, 2022

NOTE 8. Leases

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s four long-term lease agreements are classified as operating leases. These leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liability to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for a residual value guarantee and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases:

(dollars in thousands)
					June 30, 2022			December 31, 2021
Lease liabilities					$	5,135		$	5,289
Right-of-use assets					$	4,954		$	5,139
Weighted average remaining lease term					15 years			15 years
Weighted average discount rate						3.01	%		2.99	%

	Three Months Ended				Six Months Ended
Lease Cost	June 30, 2022		June 30, 2021		June 30, 2022			June 30, 2021
Operating lease cost	$	132	$	86	$	264		$	151
Short-term lease cost		4		4		8			8
Total lease cost	$	136	$	90	$	272		$	159

Cash paid for amounts included in the measurement of lease liabilities	$	116	$	71	$	232		$	126

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities is as follows:

	As of
Lease payments due	June 30, 2022
Twelve months ending June 30, 2023	$	469
Twelve months ending June 30, 2024		476
Twelve months ending June 30, 2025		489
Twelve months ending June 30, 2026		458
Twelve months ending June 30, 2027		390
Thereafter		4,345
Total undiscounted cash flows	$	6,627
Discount		(1,492	)
Lease liabilities	$	5,135