Note

Leases

As discussed in Note

11,

January 1, 2019,

the Company adopted ASU

2016

02,

“Leases”. The Company recorded initial balances during the quarter ending

March 31, 2019

for operating Right of Use (“ROU”) assets of

$9,473,587

and corresponding operating ROU liabilities of

$9,490,385.

Additionally, the Company recorded initial balances for financing ROU assets and liabilities of

$453,485.

As of

June 30, 2019,

operating lease liability balances are

$9,364,989

and financing lease liability amounts are

$426,272.

We maintain operating leases on land and buildings for certain branch facilities and our headquarters. Financing leases are primarily for equipment used at banking facilities. Most leases include options to renew, with renewal terms extending between

one

twenty

years. The exercise of renewal options is based on judgement of management as to whether or

not

the renewal option is reasonably certain to be exercised. Factors in determining whether or

not

the renewal option is reasonably certain to be exercised include, but are

not

limited to, the value of the leasehold improvements, the value of the renewal rate compared to market rates and the presence of factors that would cause significant economic penalty to the Company if the option is

not

exercised.

Expenses for finance leases are included in other interest expense and occupancy expense line items, whereas, operating leases are expensed entirely in the occupancy expense line item. Leases with a term of less than

twelve

months are

not

recorded on the balance sheet and are expensed on a straight-line basis over the lease term. Discount rates used for the purpose of valuing the leases were based on rates available to the Company on fixed rate borrowings for similar lease terms.

The components of lease expense and their impact on the statement of income for the

three

and

six

months ended

June 30, 2019

and

2018

are as follows:

	Six months ended					Three months ended
	June 30,			June 30,		June 30,			June 30,
	2019			2018		2019			2018
	(In Thousands)					(In Thousands)
Finance lease cost:
Amortization of right-of-use assets	$	54,858		$	-	$	27,213		$	-
Interest on lease liabilities		3,872			-		2,152			-
Operating lease cost		540,082			397,100		270,040			212,390
Sublease income		(22,600	)		-		(12,300	)		-

Total lease costs	$	576,212		$	397,100	$	287,105		$	212,390

Additional lease information:
Operating cash flows from financing leases	$	-
Operating cash flows from operating leases		30,078
Financing cash flows from financing leases		-
Weighted-average remaining lease term - financing leases (in years)		3.9
Weighted-average remaining lease term - operating leases (in years)		15.5
Weighted-average discount rate - financing leases		2.05	%
Weighted-average discount rate - operating leases		5.50	%

The following table sets forth, as of

June 30, 2019,

the future minimum lease cash payments and a reconciliation of the undiscounted cash flows to the lease liability:

	Financing			Operating			Total
				(In Thousands)
Remainder of: 2019	$	59		$	526		$	585
2020		117			862			979
2021		118			838			956
2022		112			827			939
2023		38			834			872
Thereafter		-			9,923			9,923
Total undiscounted future minimum lease cash payments	$	444		$	13,810		$	14,254
Present value discount		(18	)		(4,445	)		(4,463	)
Lease liability	$	426		$	9,365		$	9,791

Future minimum lease cash payments under non-cancelable operating leases as of

December 31, 2018,

prior to adoption of ASU

2016

02,

were as follows:

	December 31, 2018
	(In Thousands)
2019	$	1,032
2020		993
2021		964
2022		962
2023		956
Thereafter		3,573
	$	8,480