LEASES

12 Months Ended

Dec. 31, 2019

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of December 31, 2019, the weighted average remaining lease term was 11.2 years with a weighted average discount rate of 3.38%. Rent expense was $1.0 million, $1.1 million, and $1.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees.

Leased branch properties at December 31, 2019 and December 31, 2018 consist of the following (in thousands):



	December 31, 2019			December 31, 2018
Operating lease right-of-use asset	$	8,713		$	—
Less: accumulated amortization	(712		)	—
Operating lease right-of-use-assets, net	$	8,001		$	—

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of December 31, 2019 (in thousands):



Year	Amount
2020	$	932
2021	930
2022	869
2023	889
2024	880
2025 and thereafter	5,348
Total minimum lease payments	9,848
Less: amount representing interest	(1,764		)
Present value of net minimum lease payments	$	8,084

As of December 31, 2019, the Corporation had no operating leases that were signed, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of December 31, 2019, the weighted average remaining lease term was 13.0 years with a weighted average discount rate of 3.34%. The Corporation has included these leases in premises and equipment as of December 31, 2019 and December 31, 2018.

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of December 31, 2019 (in thousands):



Year	Amount
2020	$	376
2021	388
2022	391
2023	391
2024	391
2025 and thereafter	3,248
Total minimum lease payments	5,185
Less: amount representing interest	(1,100		)
Present value of net minimum lease payments	$	4,085

As of December 31, 2019, the Corporation had no finance leases that were signed, but had not yet commenced.

LEASES