Leases

6 Months Ended

Jun. 30, 2024

The Corporation has operating leases for retail and corporate offices, land, and equipment. The Corporation also has a finance lease for retail and corporate offices.

These leases have original terms of 1 year or longer with remaining maturities up to 38 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any purchase options or optional periods that the Corporation is reasonably likely to extend have been included in the capitalization.

The discount rate used to capitalize the operating leases is the Corporation's FHLB borrowing rate on the date of lease commencement. When determining the rate to discount specific lease obligations, the repayment period and term are considered.

Operating and finance lease costs and cash flows resulting from these leases are presented below:


	Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in thousands)	2024		2023		2024		2023
Operating lease costs	$	1,551	$	1,479	$	3,096	$	2,942
Finance lease costs	23		23		46		46
Operating lease cash flows	1,592		1,698		3,436		3,526
Finance lease cash flows	23		23		46		46

The right-of-use asset and lease liability by lease classifications on the consolidated balance sheets were as follows:


($ in thousands)	Consolidated Balance Sheets Category	Jun 30, 2024		Dec 31, 2023
Operating lease right-of-use asset	Premises and equipment	$	26,213	$	24,712
Finance lease right-of-use asset	Other assets	325		368
Operating lease liability	Accrued expenses and other liabilities	28,675		27,311
Finance lease liability	Other long-term funding	339		383

The lease payment obligations, weighted-average remaining lease term, and weighted-average original discount rate were as follows:


	Jun 30, 2024					Dec 31, 2023
($ in thousands)	Lease Payments		Weighted-average Lease Term (in years)	Weighted-average Discount Rate		Lease Payments		Weighted-average Lease Term (in years)	Weighted-average Discount Rate
Operating leases
Retail and corporate offices	$	28,130	6.10	3.47	%	$	25,729	5.76	3.12	%
Land	3,640		6.77	3.50	%	4,050		6.98	3.48	%
Equipment	408		2.00	4.62	%	408		2.50	4.62	%
Total operating leases	$	32,178	6.12	3.49	%	$	30,187	5.88	3.19	%
Finance leases
Retail and corporate offices	$	347	3.75	1.32	%	$	394	4.25	1.32	%

Total finance leases	$	347	3.75	1.32	%	$	394	4.25	1.32	%

Contractual lease payment obligations for each of the next five years and thereafter, in addition to a reconciliation to the Corporation’s lease liability, were as follows:


($ in thousands)	Operating Leases		Finance Leases		Total Leases
Six months ended December 31, 2024	$	3,309	$	46	$	3,356
2025	6,293		93		6,386
2026	5,712		93		5,805
2027	5,002		93		5,095
2028	4,118		23		4,142
Beyond 2028	7,743		—		7,743
Total lease payments	$	32,178	$	347	$	32,526
Less: interest	3,503		8		3,512
Present value of lease payments	$	28,675	$	339	$	29,014

As of June 30, 2024 and December 31, 2023, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $4 million and $3 million, respectively. The leases that had not yet commenced as of June 30, 2024 will commence between July 2024 and April 2025 with lease terms of 1 year to 7 years.