Leases

3 Months Ended

Mar. 31, 2023

Note 4. Leases

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the consolidated balance sheets. There were no new leases executed during the first three months of 2023. The following tables present information about the Company’s leases:

(dollars in thousands)	March 31, 2023
Lease liabilities	$	1,552
Right-of-use assets	$	1,478
Weighted average remaining lease term	4.04 years
Weighted average discount rate		2.91	%

	Three Months Ended March 31,
Lease cost (in thousands)	2023		2022
Operating lease cost	$	101	$	82
Total lease cost	$	101	$	82

Cash paid for amounts included in the measurement of lease liabilities	$	91	$	84

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows:

	As of
Lease payments due (in thousands)	March 31, 2023
Nine months ending December 31, 2023	$	326
Twelve months ending December 31, 2024		436
Twelve months ending December 31, 2025		395
Twelve months ending December 31, 2026		278
Thereafter		231
Total undiscounted cash flows	$	1,666
Discount		(114	)
Lease liabilities	$	1,552