Leases

3 Months Ended

Mar. 31, 2025

The Company's leases primarily consist of office space and bank branches with remaining lease terms of generally 1 to 10 years. As of March 31, 2025, operating right of use (ROU) assets and liabilities were $2.9 million and $3.0 million, respectively. As of March 31, 2025, the weighted-average remaining lease term on these operating leases was approximately 5.9 years and the weighted-average discount rate used to measure the lease liabilities was approximately 4.4%.

Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities. Currently, the Company does not have any finance leases. The ROU assets are included in premises and equipment, net on the consolidated balance sheets.

Operating lease ROU assets represent the Company's right to use an underlying asset during the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company's incremental borrowing rate at the lease commencement date.

Operating lease cost, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the consolidated statements of income. The operating lease cost was $0.14 million for the three months ended March 31, 2025, compared to $0.07 million for the three months ended March 31, 2024.

The table below summarizes the maturity of remaining operating lease liabilities:


Lease payments due in:	Operating Lease
(dollars in thousands)
2025 remaining	$	366
2026	625
2027	621
2028	630
2029	420


Thereafter	803
Total lease payments	$	3,465
Less imputed interest	(437)
Total lease liabilities, as reported	$	3,028