Leases

6 Months Ended

Jun. 30, 2025

Leases

Leases

8.  Leases

As of June 30, 2025, the Company leased real estate for seven branch offices and two administrative offices under various lease agreements. One lease is classified as a short-term lease, while the remaining leases are classified as operating leases.

The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present the value of the minimum lease payments. The Company’s leases have maturities which range from 2026 to 2048, some of which include lessee options to extend the lease term. If the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The weighted average remaining life of the lease terms for these leases was 15.4 years and 15.7 years as of June 30, 2025 and December 31, 2024, respectively. As most of our leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at each lease commencement date. The weighted average discount rate for operating leases as of June 30, 2025 and December 31, 2024 was 3.94% and 3.91%, respectively.

The components of lease cost (included in occupancy expense on the Consolidated Statements of Income) for the three and six months ended June 30, 2025 and 2024 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Lease cost:
Operating lease cost	$	200	$	181	$	400	$	363
Short-term lease cost		5		-		10		-
Total lease cost	$	205	$	181	$	410	$	363

The right-of-use asset, included in other assets, was $7,051 and $7,307 and the corresponding lease liability, included in accrued expenses and other liabilities, was $7,154 and $7,386, as of June 30, 2025 and December 31, 2024, respectively.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2025 were as follows:

Years ending December 31:
2025	$	382
2026		745
2027		705
2028		708
2029		714
Thereafter		6,814
Total future minimum lease payments		10,068
Amounts representing interest		(2,914)
Present Value of Net Future Minimum Lease Payments	$	7,154