Leases
As of December 31, 2025, the Company had operating real estate leases for three branch locations, a parking lot, and land upon which a branch location was constructed. The lease agreements have maturity dates ranging from June 2028 to September 2047. As of December 31, 2025, the weighted average remaining life of the lease term for the operating leases was 16.91 years.
The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate as of the date the lease became effective or as of January 2019 for leases in effect at adoption of ASU No. 2016-02. As of December 31, 2025 and 2024, the weighted average discount rate for operating leases was 3.64% and 3.63%, respectively.
The right-of-use assets and lease liabilities related to operating leases were as follows at December 31:
| | | | | | | | |
| 2025 | 2024 |
| (Dollars in thousands) |
| Right-of-use assets included in Other assets | $ | 2,194 | | $ | 2,310 | |
| Lease liabilities included in Accrued interest and other liabilities | 2,385 | | 2,484 | |
Total estimated rental commitments for operating leases were as follows as of December 31, 2025:
| | | | | | | | | | | |
| | (Dollars in thousands) | |
| 2026 | $ | 219 | | |
| 2027 | 225 | | |
| 2028 | 212 | | |
| 2029 | 186 | | |
| 2030 | 188 | | |
| Thereafter | 2,289 | | |
| Total | $ | 3,319 | | |
A reconciliation of the operating lease undiscounted cash flows in the maturity analysis above and the operating lease liability recognized in the consolidated balance sheets is shown below:
| | | | | |
| December 31, 2025 |
| (Dollars in thousands) |
| Undiscounted cash flows | $ | 3,319 | |
| Discount effect of cash flows | (934) | |
| Lease liabilities | $ | 2,385 | |
Operating lease costs, included in Occupancy expense, net in the consolidated statements of income amounted to $233 thousand for the years ended December 31, 2025 and 2024. Occupancy expense is shown in the consolidated statements of income, net of rental income of $270 thousand and $266 thousand for the years ended December 31, 2025 and 2024, respectively.