NOTE 8 – Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. As of June 30, 2019, we lease five of our offices under various operating lease agreements. The lease agreements have maturity dates ranging from February 2022 to August 2028, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 7.64 years as of June 30, 2019.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption and as of the lease commencement date for leases subsequently entered in to. The weighted average discount rate for leases was 3.14% as of June 30, 2019.

The total operating lease costs were $520,000 and $1.0 million for the three and six months ended June 30, 2019, respectively. The right-of-use asset, included in property and equipment, and lease liabilities, included in other liabilities, were $14.6 million and $15.1 million as of June 30, 2019, respectively. The right-of-use asset and lease liability are recognized at lease commencement by calculating the present value of lease payments over the lease term.

Maturities of lease liabilities as of June 30, 2019 were as follows:



	Operating
(dollars in thousands)	Leases
2019	$	916
2020		1,862
2021		1,907
2022		1,151
2023		1,020
Thereafter		12,331
Total undiscounted lease payments		19,187
Discount effect of cash flows		4,054
Total lease liability	$	15,133