Leases

3 Months Ended

Mar. 31, 2021

NOTE 8. Leases

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 two long-term lease agreements are classified as operating leases. These leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liability to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for a residual value guarantee 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)
	March 31, 2021			December 31, 2020
Lease liabilities	$	4,091		$	4,113
Right-of-use assets	$	3,981		$	4,014
Weighted average remaining lease term	17 years			17 years
Weighted average discount rate		3.34	%		3.34	%

	Three Months Ended
Lease Cost	March 31, 2021			March 31, 2020
Operating lease cost	$	65		$	74
Short-term lease cost		4			4
Total lease cost	$	69		$	78

Cash paid for amounts included in the measurement of lease liabilities	$	55		$	58

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

	As of
Lease payments due	March 31, 2021
Twelve months ending March 31, 2022	$	318
Twelve months ending March 31, 2023		320
Twelve months ending March 31, 2024		323
Twelve months ending March 31, 2025		326
Twelve months ending March 31, 2026		251
Thereafter		4,016
Total undiscounted cash flows	$	5,554
Discount		(1,463	)
Lease liabilities	$	4,091