Leases

12 Months Ended

Dec. 31, 2024

The Company leases land and premises for its branch banking offices, administration facilities, and ITMs. The initial terms of these leases expire at various dates through 2044. Under the provisions of most of these leases, the Company has the option to extend the leases beyond their original terms at rental rates adjusted for changes reported in certain economic indices or as reflected by market conditions. Lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. As of December 31, 2024, the Company had 14 operating leases and no financing leases.

Upon adoption of ASC Topic 842, Leases, the Bank chose to apply the incremental borrowing rate in its determination of the lease liability. The incremental borrowing rate approximates the Bank’s current rates for fully secured loans where the amount and terms applied are similar to the amount and terms of the lease.

Operating lease expenses for the years ended December 31, 2024 and 2023, totaled $762,000 and $711,000, respectively.

Supplemental balance sheet information related to leases is as follows:


(In thousands)	December 31, 2024			December 31, 2023
Operating cash flows used in operating leases	$	766		$	720
Right-of-use assets obtained in exchange for new operating lease liabilities	2,374			—
Weighted-average remaining lease terms in years for operating leases	8.65			4.23
Weighted-average discount rate for operating leases	5.06		%	5.09		%

Maturities of lease liabilities are as follows as of December 31, 2024 (in thousands):


Years Ending December 31,	Lease Liabilities
2025	$	718
2026	499
2027	428
2028	424
2029	339
Thereafter	1,558
Total undiscounted cash flows	3,966
Less: present value discount	(805)
Present value of net future minimum lease payments	$	3,161