Leases

9 Months Ended

Sep. 30, 2023

11.

LEASES

The Bank and ALC are involved in a number of operating leases, primarily for branch locations. Branch leases have remaining lease terms ranging from two years to six years, some of which include options to extend the leases for up to five years, and some of which include an option to terminate the lease within one year. The Bank also leases certain office facilities to third parties and classifies these leases as operating leases.

The following table provides a summary of the components of lease income and expense, as well as the reporting location in the interim condensed consolidated statements of operations, for the three and nine months ended September 30, 2023 and 2022:


	Location in the Condensed	Three Months Ended				Nine Months Ended
	Consolidated Statements of Operations	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(Dollars in Thousands)				(Dollars in Thousands)
Operating lease income (1)	Lease income	$	241	$	210	$	707	$	635
Operating lease expense (2)	Net occupancy and equipment	$	108	$	108	$	324	$	326

(1)

Operating lease income includes rental income from owned properties

(2)

Includes short-term lease costs. For the three and nine months ended September 30, 2023 and 2022, short-term lease costs were nominal in amount.

The following table provides supplemental lease information for operating leases on the interim condensed consolidated balance sheet as of September 30, 2023 and December 31, 2022:


	Location in the Condensed
	Consolidated Balance Sheet	September 30, 2023			December 31, 2022
		(Dollars in Thousands)
Operating lease right-of-use assets	Other assets	$	1,605		$	1,883
Operating lease liabilities	Other liabilities	$	1,684		$	1,961
Weighted-average remaining lease term (in years)			4.28			5.03
Weighted-average discount rate			3.30	%		3.30	%

The following table provides supplemental lease information for the interim condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended
	September 30, 2023		September 30, 2022
	(Dollars in Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	323	$	320

The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of September 30, 2023:


	Minimum Rental Payments
	(Dollars in Thousands)
2023	$	109
2024		438
2025		339
2026		346
2027		353
2028 and thereafter		238
Total future minimum lease payments		1,823
Less: Imputed interest		139
Total operating lease liabilities	$	1,684