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LEASES

6 Months Ended

Jun. 30, 2022

NOTE 6 - LEASES

Leases in which the Company is determined to be the lessee are primarily operating leases comprised of real estate property and office space for our corporate headquarters and profit centers with terms that extend to 2032. In accordance with ASC 842, operating leases are required to be recognized as a right-of-use asset with a corresponding lease liability.

The Company elected to not include short-term leases with initial terms of twelve months or less on the Condensed Consolidated Balance Sheets. The following presents the classification of the right-of-use assets and corresponding liabilities within the Condensed Consolidated Balance Sheets, as of the dates noted (dollars in thousands).


		June 30,		December 31,
		2022		2021
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	9,431	$	10,720

Lease Liabilities	Classification
Operating lease liabilities	Other liabilities	$	12,325	$	13,863

The Company’s operating lease agreements typically include an option to renew the lease at the Company’s discretion. To the extent the Company is reasonably certain it will exercise the renewal option at the inception of the lease, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. ASC 842 requires the use of the rate implicit in the lease when it is readily determinable. As this rate is typically not readily determinable, at the inception of the lease, the Company uses its collateralized incremental borrowing rate over a similar term. The amount of the right-of-use asset and lease liability are impacted by the discount rate used to calculate the present value of the minimum lease payments over the term of the lease.


	June 30,			December 31,
	2022			2021
Weighted-Average Remaining Lease Term
Operating leases		4.97	years		5.26	years

Weighted-Average Discount Rate
Operating leases		2.60	%		2.67	%

The Company’s operating leases contain fixed and variable lease components and it has elected to account for all classes of underlying assets as a single lease component. Variable lease costs primarily represent common area maintenance and parking. The Company recognized lease costs in Occupancy and equipment expense in the accompanying Condensed Consolidated Statements of Income. The following presents the Company’s net lease costs during the periods presented (dollars in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Lease Costs
Operating lease cost	$	824	$	731	$	1,619	$	1,483
Variable lease cost		528		416		1,086		828
Lease costs, net	$	1,352	$	1,147	$	2,705	$	2,311

The following presents a maturity analysis of the Company’s operating lease liabilities on an annual basis for each of the next five years and total amounts thereafter (dollars in thousands):


Year Ending December 31,	Operating Leases
2022⁽¹⁾	$	1,755
2023		3,210
2024		3,064
2025		2,073
2026		703
Thereafter		2,168
Total future minimum lease payments		12,973
Less: imputed interest		(648)
Present value of net future minimum lease payments	$	12,325

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⁽¹⁾ Amount represents the remaining six months of year.

Leases in which the Company is determined to be the lessor are considered operating leases and consist of the partial lease of Company owned buildings. In accordance with ASC 842, these leases have been accounted for as operating leases. During the three and six months ended June 30, 2022, the Company recognized $0.1 million and $0.2 million of lease income, respectively.

The following presents a maturity analysis of the Company's operating payments to be received on an annual basis for each of the next five years and total amounts thereafter (dollars in thousands):


		Undiscounted
Year Ending December 31,		Operating Lease Income
2022⁽¹⁾	$	134
2023		221
2024		199
2025		—
2026		—
Thereafter		—
Total undiscounted operating lease income	$	554

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⁽¹⁾ Amount represents the remaining six months of year.