NOTE (6) - Leases

The Bank has a combined operating lease for its corporate headquarters and main retail branch and a photocopier lease. The ROU asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition.

Our ROU asset represents our right to use an underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the date of implementation of the new accounting standard.

The operating lease for our corporate headquarters and main retail branch has one 5-year extension option at the then fair market rate. As this extension option is not reasonably certain of exercise, it is not included in the lease term. The Bank recorded a ROU asset of $990 thousand and an operating lease liability of $990 thousand as of June 30, 2019. The Bank has no finance leases.

The Bank recorded operating lease expense costs of $123 thousand and $121 thousand for the quarters ended June 30, 2019 and June 30, 2018, respectively, and $245 thousand and $242 thousand for the first six months of 2019 and the first six months of 2018, respectively.

Additional information regarding our operating leases is summarized below for the periods indicated dollars in thousands):


	Quarter ended		Six Months ended
	June 30, 2019		June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities for operating leases:	$	135	$	269
ROU assets obtained in exchange for lease liabilities			$	990
Weighted average remaining lease term in months				22
Weighted average discount rate				2.75	%

The future minimum payments for operating leases with remaining terms of one year or more as of June 30, 2019 were as follows (in thousands):


Six months ended December 31, 2019	$	273
Year ended December 31, 2020		555
Year ended December 31, 2021		195
Total Future Minimum Lease Payments		1,023
Amounts Representing Interest		(27)
Present Value of Net Future Minimum Lease Payments	$	996