WILSON BANK HOLDING CO

Lessee Accounting

The majority of leases in which the Company is the lessee are comprised of real estate property for branches and office space and are recorded as operating leases with terms extending beyond 2028. The Company has one finance lease, which it entered into in 2022, with a lease term through 2046. These leases are classified as operating or finance leases at commencement. Right-of-use assets representing the right to use the underlying asset and lease liabilities representing the obligation to make future lease payments are recognized on the balance sheet. These assets and liabilities are estimated based on the present value of future lease payments discounted using the Company's incremental secured borrowing rates as of the commencement date of the lease. Certain lease agreements contain renewal options which are considered in the determination of the lease term if they are deemed reasonably certain to be exercised. The Company has elected not to recognize leases with an original term of less than 12 months on the balance sheet.

The following table represents lease assets and lease liabilities as of December 31, 2023 and 2022 (in thousands).

The total lease cost related to operating leases and short term leases is recognized on a straight-line basis over the lease term. For finance leases, right-of-use assets are amortized on a straight-line basis over the lease term and interest imputed on the lease liability is recognized using the effective interest method. The components of the Bank's total lease cost were as follows for the years ended December 31, 2023 and 2022.

The weighted average remaining lease term and weighted average discount rate for operating leases at December 31, 2023 and 2022 were as follows:

The weighted average remaining lease term and weighted average discount rate for finance leases at December 31, 2023 and 2022 were as follows:

Cash flows related to operating and finance leases during the year ended December 31, 2023 and 2022 were as follows:

Future undiscounted lease payments for operating leases with initial terms of more than 12 months at December 31, 2023 and 2022 were as follows:

Future undiscounted lease payments for finance leases with initial terms of more than 12 months at December 31, 2023 and 2022 were as follows: