Note 10 - Leases

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

10. Leases

As of September 30, 2022, the Corporation leases real estate for seven branch offices under various operating lease agreements. The lease agreements have maturity dates ranging from June 2024 to December 2056, including all extension periods. The Corporation has assumed that there are currently no circumstances in which the leases would be terminated before expiration.  The weighted average remaining life of the lease term for these leases was 10.92 years as of  September 30, 2022 compared to 11.17 years as of September 30, 2021.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption.  This methodology will be continued for the commencement of any subsequent lease agreements.  The weighted average discount rate for the leases was 3.27% as of  September 30, 2022 compared to 3.29% as of September 30, 2021.

The total operating lease costs were $67,000 and $201,000, respectively, for the three and nine months ended September 30, 2022 and $63,000 and $159,000, respectively, for the three and nine months ended September 30, 2021.  The right-of-use asset, included in premises and equipment, and lease liability, included in other liabilities, was $1.4 million and $1.5 million, respectively, as of September 30, 2022, and $1.4 million and $1.6 million, respectively, as of September 30, 2021.

Total estimated rental commitments for the operating leases were as follows as of September 30, 2022:

(Dollar amounts in thousands)
Year ending December 31:
2022 (excluding nine months)	$	74
2023		296
2024		271
2025		227
2026		144
Thereafter		793
Total minimum lease payments		1,805
Discount effect of cash flows		(327	)
Present value of lease liabilities	$	1,478