LEASES

12 Months Ended

Dec. 31, 2022

We have operating leases for 1 corporate office, 4 bank branch offices, 1 former bank branch office, and 1 ATM location. Our leases have remaining lease terms of 0.83 years to 5.50 years. Some of the leases include an option to extend, the longest of which is for two 5 year terms. As of December 31, 2022, we have no additional lease commitments that have not yet commenced. Lease costs are included in non-interest expense/occupancy in the consolidated statement of operations.


	Twelve Months Ended
	December 31, 2022			December 31, 2021
The components of total lease costs were as follows:
Operating lease cost	$	554		$	558
Variable lease cost	47			47
Total lease cost	$	601		$	605

The components of total lease income were as follows:
Operating lease income	$	34		$	33

Supplemental cash flow information related to leases was as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	556		$	553
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	215		$	2

	December 31, 2022			December 31, 2021
Supplemental balance sheet information related to leases was as follows:
Operating lease right-of-use assets	$	1,700		$	2,159
Operating lease liabilities	$	1,945		$	2,228

Weighted average remaining lease term in years; operating leases	4.89			5.55
Weighted average discount rate; operating leases	2.98		%	2.73		%

Cash obligations and receipts under lease contracts as of December 31, 2022 are as follows:


Fiscal years ending December 31,	Payments		Receipts
2023	$	539	$	27
2024	467		10
2025	452		—
2026	396		—
2027	401		—
Thereafter	141		—
Total lease payments	2,396		$	37
Less: effects of discounting	(451)
Lease liability recognized	$	1,945

In November of 2022 we closed our leased Red Wing, Minnesota branch. We considered the branch closure a triggering event that required us to test the right of use asset for impairment. The carrying amount of the right of use asset was compared

to its fair value, which was determined based on an estimate of future sublease income. It was determined that the right of use asset was impaired and a $180 impairment loss was recorded. This impairment loss is included in other non-interest expense in the consolidated statements of operations.