Leases

12 Months Ended

Dec. 31, 2024

As of December 31, 2024, the Company had operating real estate leases for three branch locations, a parking lot, 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, 2024, the weighted average remaining life of the lease term for the operating leases was 17.47 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, 2024 and 2023, the weighted average discount rate for operating leases was 3.63% and 3.62%, respectively.

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


	2024		2023
	(Dollars in thousands)
Right-of-use assets included in Other assets	$	2,310	$	2,450
Lease liabilities included in Accrued interest and other liabilities	2,484		2,605

Total estimated rental commitments for operating leases were as follows as of December 31, 2024:


	(Dollars in thousands)
2025	$	215
2026	217
2027	224
2028	211
2029	184
Thereafter	2,439
Total	$	3,490

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, 2024
	(Dollars in thousands)
Undiscounted cash flows	$	3,490
Discount effect of cash flows	(1,006)
Lease liabilities	$	2,484

Operating lease costs, included in Occupancy expense, net in the consolidated statements of income were $233 thousand and $259 thousand for the years ended December 31, 2024 and 2023, respectively. Occupancy expense is shown in the consolidated

statements of income, net of rental income of $266 thousand and $261 thousand for the years ended December 31, 2024 and 2023, respectively.