NOTE 7 – Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. As of December 31, 2019, we lease seven of our offices under various operating lease agreements. The lease agreements have maturity dates ranging from February 2022 to October 2029, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 7.97 years as of December 31, 2019.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption and as of the lease commencement date for leases subsequently entered in to. The weighted average discount rate for leases was 2.86% as of December 31, 2019.

Total operating lease costs were $2.2 million and $1.8 million for the years ended December 31, 2019 and 2018, respectively. The right-of-use asset, included in property and equipment, and lease liabilities, included in other liabilities, were $19.5 million and $20.1 million as of December 31, 2019, respectively. The right-of-use asset and lease liability are recognized at lease commencement by calculating the present value of lease payments over the lease term.

Maturities of lease liabilities as of December 31, 2019 were as follows:


(dollars in thousands)	Operating Leases
2020	$	2,103
2021		2,152
2022		1,400
2023		1,273
2024		1,305
Thereafter		17,404
Total undiscounted lease payments		25,637
Discount effect of cash flows		5,549
Total lease liability	$	20,088