LEASING ACTIVITIES

9 Months Ended

Sep. 30, 2023

Leasing Activities

LEASING ACTIVITIES

NOTE 12 LEASING ACTIVITIES

As of September 30, 2023, the Bank leases four branch offices and sublets a lot adjacent to another branch 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 as of September 30, 2023 was 8.85 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 as of September 30, 2023 was 3.29%.

For the three and nine months ended September 30, 2023, operating lease expenses were $117,000 and $341,000, respectively. For the three and nine months ended September 30, 2022, operating lease expenses were $115,000 and $342,000 respectively.

The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. As of September 30, 2023, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands):

2023	$	114
2024		456
2025		456
2026		456
2027		477
Thereafter		2,226
Total lease payments		4,185
Less: imputed interest		(713)
Total	$	3,472