NOTE 8 – Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. As of September 30, 2019, we lease six of our offices under various operating lease agreements. The lease agreements have maturity dates ranging from February 2022 to September 2029, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 7.73 years as of September 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 3.02% as of September 30, 2019.

The total operating lease costs were $533,000 and $1.6 million for the three and nine months ended September 30, 2019, respectively. The right-of-use asset, included in property and equipment, and lease liabilities, included in other liabilities, were $16.1 million and $16.7 million as of September 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 September 30, 2019 were as follows:


	Operating
(dollars in thousands)	Leases
2019	$	483
2020		1,963
2021		2,008
2022		1,252
2023		1,120
Thereafter		14,227
Total undiscounted lease payments		21,053
Discount effect of cash flows		4,371
Total lease liability	$	16,682