Note

Leases

Effective

January 1, 2019,

the Company adopted ASU

2016

02,

“Leases (Topic

842

)”; the standard was adopted prospectively. The Company currently has

two

operating leases that are recorded as a right of use (“ROU”) asset and operating lease liability. The right of use asset is recorded in other assets on the consolidated balance sheet, while the lease liability is recorded in other liabilities. The ROU asset represents the right to use an underlying asset during the lease term and the lease liability represents the obligation to make lease payments arising from the lease. The current ROU asset and lease liability were recognized at the adoption date of

January 1, 2019,

based on the present value of the remaining lease payments using a discount rate that represented our incremental borrowing rate at the time of adoption. The lease expense which is comprised of the amortization of the ROU asset and the implicit interest accreted on the lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the consolidated statements of income.

The Company’s current operating leases relate primarily to bank branches with remaining terms of

months to

years. As of

September 30, 2019,

the ROU asset and lease liability were

$939

thousand and

$948

thousand, respectively. The weighted average discount rate was

3.22%

as of

September 30, 2019.

Future minimum lease payments as of

September 30, 2019,

are as follows:

Year	Amount
(Amounts in thousands)
2020	$	119
2021		119
2022		119
2023		119
2024 and thereafter		610
Total lease payments		1,086
Less: Interest		(138	)
Present value of lease liabilities	$	948