Leases

12 Months Ended

Dec. 31, 2021

Note 8 – Leases

Effective October 1, 2021, the Bank entered into an operating lease for its administrative offices at 4601 Wilshire Boulevard in Los Angeles. The right of use (“ROU”) asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition.

The ROU asset represents our right to use the 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 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 an ROU asset of $1.1 million and an operating lease liability of $1.1 million as of December 31, 2021. The Bank has no finance leases.

Rent expense under the operating lease at 4601 Wilshire Boulevard in Los Angeles was $61 thousand for 2021. The Company paid $417 thousand in rent expense in 2021 and $598 thousand in rent expense in 2020 for an operating lease on its previous administrative offices and branch location at 5055 Wilshire Boulevard in Los Angeles.

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

	Year Ended December 31, 2021

Cash paid for amounts included in the measurement of lease liabilities for operating leases:	$	57
ROU assets obtained in exchange for lease liabilities	$	1,119
Weighted average remaining lease term in months		57
Weighted average discount rate		1.10	%

The future minimum payments for operating leases with remaining terms of one year or more as of December 31, 2021 were as follows (in thousands):

Year ended December 31, 2022	$	229
Year ended December 31, 2023		236
Year ended December 31, 2024		244
Year ended December 31, 2025		252
Year ended December 31, 2026		193
Total future minimum lease payments		1,154
Amounts representing interest		(31	)
Present value of net future minimum lease payments	$	1,123