LEASING ACTIVITIES

9 Months Ended

Sep. 30, 2022

Leasing Activities

LEASING ACTIVITIES

NOTE 11 LEASING ACTIVITIES

As of September 30, 2022, the Bank leases four branch office sites resulting from sale leaseback transactions entered into in 2017 and a sublet of a lot adjacent to another office. The lease agreements have maturity dates ranging from May 2032 to December 2041. It is assumed that there are currently no circumstances in which the leases would be terminated prior to expiration. The weighted average remaining life of the lease terms at September 30, 2022 was 9.87 years.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to the lease term for each transaction. This methodology is expected to be used for any other subsequent lease agreements. The weighted average discount rate for the leases at September 30, 2022 was 3.24%.

For the nine months ended September 30, 2022 and 2021, operating lease expenses were $342 thousand and $421 thousand, respectively.

The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. At September 30, 2022, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands):

2022	$	114
2023		455
2024		455
2025		455
2026		455
Thereafter		2,698
Total lease payments		4,632
Less imputed interest		844
Total	$	3,788