Leases

3 Months Ended

Mar. 31, 2024

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2025. At March 31, 2024, the Company had lease liabilities totaling $15.8 million and right-of-use assets totaling $15.0 million related to these leases. At December 31, 2023, the Company had lease liabilities totaling $16.9 million and right-of-use assets totaling $16.0 million. The calculated amount of the right-of-use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.

At March 31, 2024, the weighted average remaining lease term for operating leases was 8.24 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.27%. At December 31, 2023, the weighted average remaining lease term for operating leases was 8.18 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.24%.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:


	For the Three Months Ended March 31,
(in thousands)		2024		2023
Operating lease cost		$	1,127	$	1,190
Short-term lease cost		—		—
Variable lease cost		14		15
Sublease income		(26)		(32)
Net lease cost		$	1,115	$	1,173

The table below presents other information on the Company's operating leases for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,071	$	1,113
Right-of-use assets obtained in exchange for new operating lease liabilities	—		309

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three months ended March 31, 2024 or March 31, 2023. At March 31, 2024, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and a reconciliation of the undiscounted cash flows to the total operating lease liability at March 31, 2024 are as follows:


(in thousands)
Within one year	$	4,030
After one year but within three years	5,771
After three years but within five years	3,096
After five years	5,381
Total undiscounted cash flows	18,278
Discount on cash flows	(2,458)
Total operating lease liabilities	$	15,820