Leases

12 Months Ended

Dec. 31, 2023

As of December 31, 2023, the Company had operating real estate leases for three branch locations, one loan production office and land upon which a branch location was constructed. The lease agreements have maturity dates ranging from June 2028 to September 2047. As of December 31, 2023, the weighted average remaining life of the lease term for the operating leases was 18.13 years.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate as of the date the lease became effective or as of January 2019 for leases in effect at adoption of ASU No. 2016-02. As of December 31, 2023 and 2022, the weighted average discount rate for operating leases was 3.62% and 3.55%, respectively.

The right-of-use assets and lease liabilities related to operating leases were as follows at December 31:


	2023		2022
	(Dollars in thousands)
Right-of-use assets included in Other assets	$	2,450	$	2,152
Lease liabilities included in Accrued interest and other liabilities	2,605		2,255

Total estimated rental commitments for operating leases were as follows as of December 31, 2023:


	(Dollars in thousands)
2024	$	213
2025	215
2026	217
2027	224
2028	211
Thereafter	2,623
Total	$	3,703

A reconciliation of the operating lease undiscounted cash flows in the maturity analysis above and the operating lease liability recognized in the consolidated balance sheets is shown below:


	December 31, 2023
	(Dollars in thousands)
Undiscounted cash flows	$	3,703
Discount effect of cash flows	(1,098)
Lease liabilities	$	2,605

Operating lease costs, included in Occupancy expense, net in the consolidated statements of income were $259 thousand and $206 thousand for the years ended December 31, 2023 and 2022, respectively. Occupancy expense is shown in the consolidated statements of income, net of rental income of $261 thousand and $273 thousand for the years ended December 31, 2023 and 2022, respectively.