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Leases

12 Months Ended

Dec. 31, 2023

8. Leases

Substantially all of the leases in which the Corporation is the lessee are comprised of real estate property for branches, ATM locations, and office equipment with terms extending through 2030. All of the Corporation’s leases are classified as operating leases. The present value of lease payments is reported as a lease liability and right of use asset on the Corporation’s Consolidated Statement of Financial Condition.

The following table represents the Consolidated Statements of Financial Condition classification of the Corporation’s right-of-use assets and lease liabilities. The Corporation elected not to include short-term leases (i.e., leases with remaining terms of 12 months or less), or equipment leases that were deemed immaterial on the Consolidated Statement of Financial Condition.



(in thousands)	December 31, 2023		December 31, 2022
Lease Right-of Use Assets
Operating lease right-of-use assets	$	1,367	$	1,898
Lease Liabilities
Operating lease liabilities	$	1,556	$	2,373

In calculating the present value of the lease payments, the Corporation has utilized its incremental borrowing rate based on electing the original lease term to account for each lease component.

The following table presents the weighted-average lease term and discount rate for operating leases at December 31, 2023:



	December 31, 2023	December 31, 2022
Weighted-average remaining lease term
Operating leases	5.33 years	6.17 years
Weighted-average discount rate
Operating leases	5.16%	5.00%

The Corporation elected, for all classes of underlying assets, to separate lease and non-lease components. Total operating lease expense was $0.6 million and $0.5 million for the years ended December 31, 2023 and December 31, 2022, respectively. Short-term lease expense was approximately $20 thousand for the year ended December 31, 2023 and 2022.

In the fourth quarter of 2023, the Bank announced the closure of four of its branches with an effective closing date of February 29, 2024. In conjunction with the announced branch closures, the Bank recognized accelerated lease expense of approximately $0.1 million in 2023.

Future minimum payments for operating leases with initial or remaining terms of one year or more at December 31, 2023 were as follows:


(in thousands)	Amount
2024	$	368
2025		356
2026		283
2027		285
2028		240
Thereafter		270
Total future minimum lease payments		1,802
Amounts representing interest		(246)
Present value of net future minimum lease payments	$	1,556