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Leases

6 Months Ended

Jun. 30, 2024

7. LEASES

Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease costs for future minimum lease payments are recognized on a straight-line basis over the lease terms. Variable lease costs are expensed in the period in which the obligations are incurred. Sublease income is recognized on a straight-line basis over the sublease term.

The Company’s operating lease obligations are for branch office facilities. The components of lease expense and other lease information as of and during the three and six-month periods ended June 30, 2024 and 2023 were as follows:


	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
(in thousands)	2024		2023		2024		2023
Operating lease cost	$	1,153	$	1,239	$	2,334	$	2,508
Variable lease cost		260		444		508		882
Sublease income		(42)		(139)		(85)		(277)
Total lease cost	$	1,371	$	1,544	$	2,757	$	3,113

Cash paid for amounts included in measurement of lease liabilities
Operating cash outflows from operating leases	$	1,105	$	1,357	$	2,168	$	2,755

ROU assets obtained in exchange for new operating lease liabilities	$	333	$	943	$	3,789	$	984

Reduction to ROU assets resulting from reduction to lease liabilities	$	—	$	—	$	—	$	200


(in thousands)	June 30, 2024			December 31, 2023
Operating lease ROU assets	$	15,417		$	13,666
Operating lease liabilities	$	16,783		$	14,880
Weighted-average remaining lease term - operating leases		6.14	years		6.08	years
Weighted-average discount rate - operating leases		3.56	%		3.21	%

Future minimum lease payments under non-cancellable leases as of June 30, 2024 were as follows:


(in thousands)	June 30, 2024
2024	$	1,994
2025		4,197
2026		3,473
2027		2,107
2028		1,537
2029		1,443
Thereafter		4,489
Total future minimum lease payments	$	19,240
Less imputed interest		(2,457)
Total operating lease liability	$	16,783