Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Note 7. Leases

The Corporation leases various assets in the course of its operations that are subject to recognition on the balance sheet. The Corporation considers all of its leases to be operating leases and it has no finance leases. The leased assets are comprised of equipment, and buildings and land (collectively real estate). The equipment leases are shorter-term than the real estate leases, and generally have a fixed payment over a defined term without renewal options. Certain equipment leases have purchase options and it was determined the option was not reasonably certain to be exercised. The real estate leases are longer-term and may contain renewal options after the initial term, but none of the real estate leases contain a purchase option. The renewal options on real estate leases were reviewed and if it was determined the option was reasonably certain to be renewed, the option term was considered in the determination of the lease liability. There is only one real estate lease with a variable payment based on an index included in the lease liability. None of the leases contain any restrictive covenants and there are no significant leases that have not yet commenced. The discount rate used to determine the lease liability is based on the Bank’s fully secured borrowing rate from the Federal Home Loan Bank for a term similar to the lease term. Operating lease expense is included in net occupancy expense in the consolidated statements of income.

Lease costs:

The components of total lease cost were as follows:

	Three Months Ended ‎March 31,
(Dollars in thousands)	2021		2020
Operating lease cost	$	174	$	158
Short-term lease cost		—		2
Variable lease cost		24		14
Total lease cost	$	198	$	174

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Supplemental Lease Information:

	Three Months Ended ‎March 31,
(Dollars in thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	162	$	152
Weighted-average remaining lease term (years)		11.5		12.8
Weighted-average discount rate		3.34%		3.53%

Lease Obligations:

Future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2021 are as follows:

(Dollars in thousands)
2021	$	494
2022		640
2023		650
2024		628
2025		588
2026 and beyond		3,395
Undiscounted cash flow		6,395
Imputed Interest		(1,170)
Total lease liability	$	5,225