Note

Leases

Operating leases are recorded as a right of use (“ROU”) asset and operating lease liability.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 ROU asset and lease liability have been recognized based on the present value of the lease payments using a discount rate that represented our incremental borrowing rate at the lease commencement date or the date of adoption of ASU

2016

02.

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. The Company’s ROU asset was

$896

thousand as of

March 31, 2020

compared to

$917

thousand as of

December 31, 2019.

The operating lease liability as of

March 31, 2020

was

$980

comparted to

$1.01

million as of

December 31, 2019.

The Company’s total operating leases have remaining terms of

–

years; compared with

years as of

December 31, 2019.

The

March 31, 2020

weighted average discount rate of

3.22%

did

not

change from

December 31, 2019.

Future minimum lease payments as of the dates indicated are as follows:

Year	March 31, 2020
(Amounts in thousands)
2021	$	154
2022		154
2023		122
2024		119
2025 and thereafter		550
Total lease payments		1,099
Less: Interest		(119	)
Present value of lease liabilities	$	980

Year	December 21, 2019
(Amounts in thousands)
2020	$	154
2021		154
2022		131
2023		119
2024 and thereafter		580
Total lease payments		1,138
Less: Interest		(129	)
Present value of lease liabilities	$	1,009