Leases

12 Months Ended

Dec. 31, 2024

Note 23 – Leases

The Company’s leases are recorded under ASC Topic 842 “Leases.” The right-of-use assets and lease liabilities are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets.

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 currently leases four of its operating locations under long-term leases (greater than 12 months). Leases for two of these locations are classified as operating leases and two are classified as financing leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The 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.

The Bank leases its principal Lynchburg, Virginia, location from Jamesview Investments, LLC, a legal entity which is wholly-owned by a related party. This lease is classified as a finance lease and the related lease liability totaled $2.0 million at December 31, 2024.

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Note 23 – Leases (continued)

The following table represents information about the Company’s operating leases:


	December 31,
(Dollars in thousands)	2024		2023
Lease liabilities	$	1,308	$	1,192
Right-of-use assets	$	1,227	$	1,125
Weighted average remaining lease term		9.7 years		11.8 years
Weighted average discount rate		3.51%		3.44%

The following table represents information about the Company’s finance leases:


	December 31,
(Dollars in thousands)	2024		2023
Lease liabilities	$	2,620	$	3,022
Right-of-use assets	$	2,245	$	2,659
Weighted average remaining lease term		6.7 years		7.2 years
Weighted average discount rate		2.73%		2.70%


	For the Year Ended December 31,
Lease cost (in thousands)	2024		2023
Operating lease cost	$	182	$	122
Finance lease cost:
Amortization of right-of-use assets		414		414
Interest on lease liabilities		76		86
Total lease cost	$	672	$	622

Cash paid for amounts included in measurement
of operating lease liabilities	$	169	$	130

Cash paid for amounts included in measurement
of finance lease liabilities	$	478	$	454

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Note 23 – Leases (continued)

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


		Operating Lease		Finance Lease
		Liabilities		Liabilities
		As of December 31,		As of December 31,
Lease payments due (in thousands)		2024		2024
Twelve months ending December 31, 2025	$	172	$	515
Twelve months ending December 31, 2026		177		516
Twelve months ending December 31, 2027		187		517
Twelve months ending December 31, 2028		142		517
Twelve months ending December 31, 2029		127		325
Thereafter		746		491
Total undiscounted cash flows	$	1,551	$	2,881
Discount		(243)		(261)
Lease Liabilities	$	1,308	$	2,620