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Leases

3 Months Ended

Mar. 31, 2020

NOTE 8 – Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. As of March 31, 2020, 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 7.78 years as of March 31, 2020.

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 March 31, 2020.

The total operating lease costs were $596,000 and $528,000 for the three months ended March 31, 2020 and 2019, respectively. The ROU asset, included in property and equipment, and lease liabilities, included in other liabilities, were $19.1 million and $19.7 million as of March 31, 2020, respectively, compared to $19.5 million and $20.1 million as of December 31, 2019, respectively. The ROU 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 March 31, 2020 were as follows:


(dollars in thousands)	Operating Leases
2020	$	1,581
2021		2,152
2022		1,400
2023		1,273
2024		1,305
Thereafter		17,405
Total undiscounted lease payments		25,116
Discount effect of cash flows		5,407
Total lease liability	$	19,709