Leases

9 Months Ended

Sep. 30, 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. Right-of-use assets and lease liabilities are included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets.

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)
	September 30, 2024			December 31, 2023
Lease liabilities	$	4,400		$	4,653
Right-of-use assets	$	4,097		$	4,387
Weighted average remaining lease term	13 years			14 years
Weighted average discount rate		3.14	%		3.09	%

	Three Months Ended						Nine Months Ended
Lease Cost	September 30, 2024			September 30, 2023			September 30, 2024		September 30, 2023
Operating lease cost	$	132		$	132		$	396	$	396
Short-term lease cost		4			4			11		11
Total lease cost	$	136		$	136		$	407	$	407

Cash paid for amounts included in the measurement of lease liabilities	$	120		$	118		$	359	$	354

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	September 30, 2024
Twelve months ending September 30, 2025	$	497
Twelve months ending September 30, 2026		428
Twelve months ending September 30, 2027		390
Twelve months ending September 30, 2028		394
Twelve months ending September 30, 2029		399
Thereafter		3,454
Total undiscounted cash flows	$	5,562
Discount		(1,162	)
Lease liabilities	$	4,400