Leases

3 Months Ended

Mar. 31, 2024

NOTE 8. Leases

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s four long-term lease agreements are classified as operating leases. These leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liability to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for a residual value guarantee and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases:


(dollars in thousands)
	March 31, 2024			December 31, 2023
Lease liabilities	$	4,588		$	4,653
Right-of-use assets	$	4,291		$	4,387
Weighted average remaining lease term	13 years			14 years
Weighted average discount rate		3.11	%		3.09	%

	Three Months Ended
Lease Cost	March 31, 2024			March 31, 2023
Operating lease cost	$	132		$	132
Short-term lease cost		4			4
Total lease cost	$	136		$	136

Cash paid for amounts included in the measurement of lease liabilities	$	118		$	117

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities is as follows:


(dollars in thousands)	As of
Lease payments due	March 31, 2024
Twelve months ending March 31, 2025	$	481
Twelve months ending March 31, 2026		484
Twelve months ending March 31, 2027		393
Twelve months ending March 31, 2028		392
Twelve months ending March 31, 2029		397
Thereafter		3,654
Total undiscounted cash flows	$	5,801
Discount		(1,213	)
Lease liabilities	$	4,588