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Lease Commitments | 9 Months Ended
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Sep. 30, 2019
Lease Commitments |
Lease Commitments | 13. Lease Commitments Due to the adoption of ASU 2016-02, Leases (Topic 842), the Company completed a comprehensive review and analysis of all its property and equipment contracts. As a result of this review, it was determined that the Company leases eight office locations under both operating and financing leases and one copy machine under a short-term lease. Several assumptions and judgments were made when applying the requirements of Topic 842 to the Company's existing lease commitments, including the allocation of consideration in the contracts between lease and nonlease components, determination of the lease term, and determination of the discount rate used in calculating the present value of the lease payments. The Company has elected to account for the variable nonlease components, such as common area maintenance charges, utilities, real estate taxes, and insurance, separately from the lease component. Such variable nonlease components are reported in net occupancy expense on the Consolidated Statements of Operations when paid. These variable nonlease components were excluded from the calculation of the present value of the remaining lease payments, therefore, they are not included in the right-of-use assets and lease liabilities reported on the Consolidated Balance Sheets. The following table presents the lease cost associated with both operating and financing leases for the three and nine month periods ending September 30, 2019 (in thousands). Total rent expense recorded during the three and nine month periods ended September 30, 2018 was $102,000 and $318,000, respectively.
|  | Three months ended |  | Nine months ended
|  | September 30, 2019 |  | September 30, 2019
Lease cost |  |  |  |  |  |
Financing lease cost: |  |  |  |  |  |
Amortization of right-of-use asset |  | $ | 64 |  | $ | 193
Interest expense |  |  | 29 |  |  | 88
Operating lease cost |  |  | 29 |  |  | 87
Total lease cost |  | $ | 122 |  | $ | 368
Certain of the Company's leases contain options to renew the lease after the initial term. Management considers the Company's historical pattern of exercising renewal options on leases and the performance of the leased locations, when determining whether it is reasonably certain that the leases will be renewed. If management concludes that there is reasonable certainty about the renewal option, it is included in the calculation of the remaining term of each applicable lease. The discount rate utilized in calculating the present value of the remaining lease payments for each lease was the Federal Home Loan Bank of Pittsburgh advance rate corresponding to the remaining maturity of the lease. The following table presents the weighted-average remaining lease term and discount rate for the leases outstanding at September 30, 2019.
|  | Operating |  | Financing |
Weighted-average remaining term (years) |  | 12.1 |  | 17.2 |
Weighted-average discount rate |  | 3.45 | % | 3.60 | %
The following table presents the undiscounted cash flows due related to operating and financing leases as of September 30, 2019, along with a reconciliation to the discounted amount recorded on the Consolidated Balance Sheets.
Undiscounted cash flows due: |  | Operating |  | Financing
Within 1 year |  | $ | 117 |  | $ | 302
After 1 year but within 2 years |  |  | 119 |  |  | 275
After 2 years but within 3 years |  |  | 110 |  |  | 277
After 3 years but within 4 years |  |  | 69 |  |  | 278
After 4 years but within 5 years |  |  | 69 |  |  | 240
After 5 years |  |  | 608 |  |  | 3,068
Total undiscounted cash flows |  |  | 1,092 |  |  | 4,440
Discount on cash flows |  |  | (206) |  |  | (1,230)
Total lease liabilities |  | $ | 886 |  | $ | 3,210
Under Topic 842, the lessee can elect to not record on the Consolidated Balance Sheets a lease whose term is twelve months or less and does not include a purchase option that the lessee is reasonably certain to exercise. As of September 30, 2019, the Company had one short-term equipment lease which it has elected to not record on the Consolidated Balance Sheets.

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- References No definition available. + Details
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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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