Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 5. 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 year ended December 31, 2023. The following tables present information about the Company’s leases:

(dollars in thousands)	December 31, 2023
Lease liabilities	$	1,248
Right-of-use assets	$	1,148
Weighted average remaining lease term	3.37 years
Weighted average discount rate		3.06	%

	Years Ended December 31,
(dollars in thousands)	2023		2022
Operating lease cost	$	439	$	349
Total lease cost	$	439	$	349
Cash paid for amounts included in the measurement of lease liabilities	$	417	$	351

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
(dollars in thousands)	December 31, 2023
Twelve months ending December 31, 2024	$	423
Twelve months ending December 31, 2025		382
Twelve months ending December 31, 2026		278
Twelve months ending December 31, 2027		208
Thereafter		24
Total undiscounted cash flows	$	1,315
Discount		(67	)
Lease liabilities	$	1,248

The aggregate rental expense of premises and equipment was $446 thousand and $415 thousand for years ended December 31, 2023 and 2022, respectively.