LEASES

6 Months Ended

Jun. 30, 2023

9. LEASES

The Company leases space, primarily for branch facilities and small equipment under operating leases. The Company’s leases often include one or more options to renew at the Company’s discretion, and some of the Company’s leases include options to terminate within one year. When it is reasonably certain that the Company will exercise the option to renew or extend the lease term, that option is included in estimating the value of the ROU asset and lease liability. The Company’s leases contain customary restrictions and covenants and do not contain any residual value guarantees. The Company has certain intercompany leases and subleases between its subsidiaries, and these transactions and balances have been eliminated in consolidation and are not reflected in the tables and information presented below. As of June 30, 2023 and December 31, 2022, the Company had no finance leases.

The balance sheet components of the Company’s leases are as follows (in thousands):

	June 30, 2023		December 31, 2022
Operating lease right of use assets (included in Other assets)	$	8,926	$	7,938
Operating lease liabilities (included in Accrued expenses and other liabilities)		9,863		8,897

The Company does not generally enter into leases which contain variable payments, other than due to the passage of time. Operating lease costs, including short-term lease costs were $954 thousand and $1.7 million, respectively, for the three and six months ended June 30, 2023. Operating lease costs, including short-term lease costs were $747 thousand and $1,411 million, respectively, for the three and six months ended June 30, 2022.

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	546	$	492	$	1,030	$	971
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	1,215	$	—	$	2,032	$	—

For operating leases the Company’s weighted average remaining lease terms in years and weighted average discount rate was 10.22 and 5.38%, respectively, as of June 30, 2023, and 9.83 and 4.65%, respectively, as of December 31, 2022.

Future undiscounted lease payments at June 30, 2023, under operating lease agreements, are presented below (in thousands).

2023	$	955
2024		1,656
2025		1,321
2026		1,259
2027		1,209
Thereafter		6,642
Total minimum lease payments		13,042
Less: Amount representing interest		(3,179	)
Lease liabilities	$	9,863

As of June 30, 2023, the Company had no additional operating leases that have not yet commenced.