Leases

9 Months Ended

Sep. 30, 2019

Note 14 – Leases

On January 1, 2019, the Company adopted ASU

No. 2016-02

“Leases (Topic 842)”

and all subsequent ASUs that modified Topic 842. The Company elected the prospective application approach provided by ASU

2018-11

and did not adjust prior periods for ASC 842. The Company also elected certain practical expedients within the standard and consistent with such elections did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases, and did not reassess any initial direct costs for existing leases. The implementation of the new standard resulted in recognition of a

right-of-use

asset and lease liability of $7.0 million at the date of adoption, which is related to the Company’s lease of premises used in operations. The

right-of-use

asset and lease liability are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets.

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease.

Right-of-use

assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases:


(Dollars in thousands)	September 30, 2019
Lease liabilities	$	6,672
Right-of-use assets	$	6,575
Weighted average remaining lease term		6.26 years
Weighted average discount rate		2.79	%


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Lease Cost (in thousands)	2019		2018		2019		2018
Operating lease cost	$	369	$	213	$	1,104	$	582
Total lease cost	$	369	$	213	$	1,104	$	582
Cash paid for amounts included in the measurement of lease liabilities	$	218	$	213	$	874	$	582

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows:


	As of
Lease payments due (in thousands)	September 30, 2019
Three months ending December 31, 2019	$	314
Twelve months ending December 31, 2020		1,305
Twelve months ending December 31, 2021		1,230
Twelve months ending December 31, 2022		1,022
Twelve months ending December 31, 2023		934
Twelve months ending December 31, 2024		640
Thereafter		1,979

Total undiscounted cash flows		7,425
Discount		(753	)

Lease liabilities	$	6,672