Leases

3 Months Ended

Mar. 31, 2021

Note 15 – Leases

The Company has entered into operating lease agreements for two of its community banking branch locations, all of its mortgage banking office locations, and some of its office equipment. The leases have fixed terms defined regarding the payments and length. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated statements of financial condition. Some of the leases included options to extend the leases. These options are reviewed and factored into the length of the lease if the option is expected to be extended. Leases did not contain an implicit rate; therefore, the Company used the incremental borrowing rates for the discount rate. There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three months ended March 31, 2021 and March 31, 2020.

At March 31, 2021, the Company had lease liabilities totaling $7.5 million and right-of-use assets totaling $7.1 million related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively, on the consolidated statements of financial condition.

The cost components of our operating leases were as follows for the three months ended March 31, 2021 and March 31, 2020:

	Three months ended March 31, 2021		Three months ended March 31, 2020
	(In Thousands)
Operating lease cost	$	770	$	824
Variable cost		117		109
Short-term lease cost		151		193
Total	$	1,038	$	1,126

At March 31, 2021, the Company had leases that had not yet commenced, but will create approximately $13,000 of additional lease liabilities and right-of-use assets for the Company in the second quarter of 2021.

The table below summarizes other information related to our operating leases:

	Three months ended March 31, 2021
	(Dollars in Thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	859
Initial recognition of right of use asset		602
Initial recognition of lease liabilities		602
Weighted average remaining lease term - operating leases, in years		3.4
Weighted average discount rate - operating leases		5.2	%

As of March 31, 2021, lease liability information for the Company is summarized in the following table.

Maturity analysis	Operating leases
	(In Thousands)
One year or less	$	2,742
More than one year through two years		2,128
More than two years through three years		1,484
More than three years through four years		804
More than four years through five years		452
More than five years		874
Total lease payments		8,484
Present value discount		(952	)
Lease liability	$	7,532