LEASES

3 Months Ended

Mar. 31, 2023

NOTE 8 – LEASES

Substantially all of the Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent leases for branch buildings and office space to conduct business. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The lease expense for these leases are recorded on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as either operating or financing leases on the consolidated balance sheet. The Company has no finance lease arrangements. Operating leases have remaining lease terms ranging from 1 month to 18 years, some of which include options to extend the leases for up to 15 years. Operating lease ROU assets and operating lease liabilities are valued based on the present value of future minimum lease payments, discounted with an incremental borrowing rate for the same term as the underlying lease. The Company has one lease arrangement that contains variable lease payments that are adjusted periodically for an index.

Balance sheet information related to leases is as follows:

	As of March 31, 2023		As of December 31, 2022
Operating leases:
Operating lease right-of-use assets	$	1,246	$	1,294
Operating lease liabilities		1,246		1,294

The components of lease cost were as follows:

	Three months ended March 31,
	2023			2022
Operating lease cost		$	51		$	42
Short-term lease expense			—			10

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2023 are as follows:

	Operating Leases
2023 (remaining)	$	121
2024		154
2025		154
2026		140
2027		129
Thereafter		873
Total lease payments		1,571
Less: Imputed Interest		(325	)
Total operating leases	$	1,246

Other information was as follows:

	As of March 31, 2023			As of December 31, 2022
Weighted-average remaining lease term for operating leases	11.9 years			12.1 years
Weighted-average discount rate for operating leases		2.71	%		2.70	%