Leases

12 Months Ended

Dec. 31, 2023

NOTE 13. Leases

The Company leases certain office properties and equipment used in its operations in the normal course of business. Leases greater than 12 months in duration are recorded in the consolidated balance sheets at the lease commencement date and are classified as either operating or finance leases based on the Company's assessment of the underlying agreement.

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 for office properties are all 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. These lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. Right-of-use assets and leases liabilities are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets.

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


(dollars in thousands)	December 31, 2023			December 31, 2022
Lease liability	$	4,653		$	4,978
Right-of-use asset	$	4,387		$	4,766
Weighted average remaining lease term	14 years			14 years
Weighted average discount term		3.09	%		3.04	%


	Twelve Months Ended
Lease Cost	December 31, 2023		December 31, 2022
Operating lease cost	$	528	$	528
Variable lease cost		—		—
Short-term lease cost		14		15
Total lease cost	$	542	$	543

Cash paid for amounts included in the measurement of lease liabilities	$	473	$	466

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	December 31, 2023
Twelve months ending December 31, 2024	$	480
Twelve months ending December 31, 2025		504
Twelve months ending December 31, 2026		397
Twelve months ending December 31, 2027		391
Twelve months ending December 31, 2028		395
Thereafter		3,754
Total undiscounted cash flows	$	5,921
Discount		(1,268	)
Lease liability	$	4,653