Annual report pursuant to Section 13 and 15(d)

LEASES

v3.23.4
LEASES
12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases
Note 7
LEASES
Operating leases in which the Company is the lessee are recorded as operating
 
lease right of use (“ROU”) assets and operating
liabilities, included in other assets and liabilities, respectively,
 
on its Consolidated Statement of Financial Condition.
 
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 expense, 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 occupancy expense in
 
the Consolidated Statement of Income.
 
The Company’s operating
 
leases primarily relate to banking offices with remaining lease terms
 
from one to
forty-three years
.
 
The
Company’s leases are not complex
 
and do not contain residual value guarantees, variable lease payments, or
 
significant
assumptions or judgments made in applying the requirements of ASC Topic
 
842.
 
Operating leases with an initial term of 12
months or less are not recorded on the Consolidated Statement of Financial Condition
 
and the related lease expense is recognized
on a straight-line basis over the lease term.
 
At December 31, 2022, ROU assets and liabilities were $
22.3
 
million and $
22.7
million, respectively.
 
At December 31, 2021, the operating lease ROU assets and liabilities were $
11.5
 
million and $
12.2
 
million,
respectively.
 
The Company does not have any finance leases or any significant lessor agreements.
The table below summarizes our lease expense and other information at
 
December 31, related to the Company’s
 
operating leases:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Thousands)
2022
2021
2020
Operating lease expense
$
1,719
$
1,445
$
1,018
Short-term lease expense
658
663
530
Total lease expense
$
2,377
$
2,108
$
1,548
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
1,937
$
1,609
$
1,174
Right-of-use assets obtained in exchange for new operating lease liabilities
12,475
784
11,101
Weighted-average
 
remaining lease term — operating leases (in years)
19.5
25.3
25.4
Weighted-average
 
discount rate — operating leases
3.1
%
2.0
%
2.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table below summarizes the maturity of remaining lease liabilities:
(Dollars in Thousands)
December 31, 2022
2022
$
2,482
2023
2,307
2024
2,089
2025
2,013
2026
1,939
2027 and thereafter
18,922
Total
$
29,752
Less: Interest
(7,086)
Present Value
 
of Lease Liability
$
22,666
At December 31, 2022, the Company had three additional operating
 
lease obligations for banking offices that have not yet
commenced.
 
The first lease has payments totaling $
1.9
 
million based on the initial contract term of
15
 
years, the second has
payments totaling $
1.4
 
million based on the initial contract term of
10
 
years, and the third has payments totaling $
0.1
 
million
based on the initial contract term of
5
 
years.
 
Payments for all three banking offices are expected to commence during
 
the first
quarter of 2023.
 
A related party is the lessor in an operating lease with the Company.
 
The Company’s minimum payment
 
is $
0.2
 
million annually
through 2042, and will reprice at annual fair market rental value until 2052,
 
for an aggregate remaining obligation of $
2.4
 
million
at December 31, 2022.