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OPERATING LEASE COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2020
OPERATING LEASE COMMITMENTS AND CONTINGENCIES |
OPERATING LEASE COMMITMENTS AND CONTINGENCIES | 17. OPERATING LEASE COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Corporation leases certain branch locations, office space and equipment. All leases are classified as operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. Certain leases include options to renew, with renewal terms that can extend the lease term from one to eight years that are reasonably certain of being exercised. 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 into after January 1, 2019. At December 31, 2020, discount rates ranged from 0.84% to 3.50% with a weighted-average discount rate of 2.07%. As shown in the table below, at December 31, 2020, right-of-use assets of $3,446,000 were included in other assets, and the related liabilities totaling the same amount were included in accrued interest and other liabilities, in the consolidated balance sheets. At December 31, 2019, right of use assets totaled $1,637,000. In 2020, the Corporation recorded right-of-use asset and lease liabilities from the Covenant acquisition of $1,956,000 and additional right-of-use assets obtained in exchange for lease liabilities of $167,000. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, | ​ | December 31,
(In Thousands) |  | 2020 |  | 2019
Other assets | ​ | $ | 3,446 | ​ | $ | 1,637
Other liabilities | ​ | $ | 3,446 | ​ | $ | 1,637
​ In 2020 and 2019, operating lease expenses are included in the line items of the consolidated statements of income: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(In Thousands) |  | 2020 |  | 2019
Occupancy expense, net | ​ | $ | 342 | ​ | $ | 214
Furniture and equipment expense | ​ |  | 29 | ​ |  | 37
Total | ​ | $ | 371 | ​ | $ | 251
​ A maturity analysis of the Corporation’s lease liabilities at December 31, 2020 is as follows: ​ (In Thousands) Lease Payments Due ​
​ | ​ | ​ | ​
2021 |  | $ | 484
2022 | ​ |  | 465
2023 | ​ |  | 453
2024 | ​ |  | 446
2025 | ​ |  | 426
Thereafter | ​ |  | 1,494
Total lease payments | ​ |  | 3,768
Discount on cash flows | ​ |  | (322)
Total lease liabilities | ​ | $ | 3,446
​ Litigation Matters ​ In the normal course of business, the Corporation is subject to pending and threatened litigation in which claims for monetary damages are asserted. In management’s opinion, the Corporation’s financial position and results of operations would not be materially affected by the outcome of these legal proceedings. ​ Trust Department Tax Reporting Contingency ​ Estimated losses related to trust department tax compliance matters totaled $571,000 in 2020, up from $12,000 in 2019. These losses are included in other noninterest expense in the consolidated statements of income. The operational losses in 2020 arose mainly from compliance oversight and failure of the trust department to provide timely responses to tax notices which occurred between 2007 and 2019 but were identified in 2020. In 2020, the Corporation made changes in internal controls and personnel responsible for trust department tax administration activities. Management implemented the changes in internal controls and personnel in an effort to mitigate and prevent the likelihood of new instances of non-compliance from trust department tax administration activities. At December 31, 2020, the balance of accrued interest and other liabilities in the consolidated balance sheets includes $322,000 related to specific tax compliance matters that have been identified; however, no estimate can be made of the amount of additional expenses that may be incurred related to these matters.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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