Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

10. Leases

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. The Company chose to use the effective date approach. As such, all periods presented after January 1, 2019 are under ASC 842 whereas periods presented prior to January 1, 2019 are in accordance with prior lease accounting of ASC 840. Financial information was not updated and the disclosures required under ASC 842 was not provided for dates and periods before January 1, 2019.

As of March 31, 2019, the Company has entered into lease agreements covering eight First Insurance offices, five banking center locations, one loan production office, two land leases for which the Company owns the banking centers, one land lease which is primarily used for parking, one land lease for future branch development and numerous stand-alone Automated Teller Machine sites with varying terms and options to renew. First Federal and First Insurance share office space for one lease as a branch and insurance office. The lease agreements have maturity dates ranging from December 2019 to December 2039, some of which include options for multiple five and ten year extensions. The weighted average remaining life of the lease term for these leases was 17.84 years as of March 31, 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 3.49% as of March 31, 2019.

The total operating lease costs were $243 for the three months ended March 31, 2019 and $249 for the three months ended March 31, 2018.

The short-term lease costs and cash payments on operating leases, $0 and $236 for the three months ended March 31, 2019 respectively. The right-of-use asset, included in other assets, and lease liabilities, included in other liabilities, were $8,647 and $9,185 as of March 31, 2019 respectively.

Total estimated rental commitments for the operating leases were as follows as of March 31, 2019:

2019	$	677
2020		982
2021		941
2022		864
2023		840
Thereafter		11,379
Total	$	15,683

Future minimum commitments under non-cancelable operating leases were as follows as of December 31, 2018:

2019	$	967
2020		884
2021		843
2022		768
2023		739
Thereafter		8,078
Total	$	12,279

A reconciliation of the undiscounted cash flows in the maturity analysis above and the lease liability recognized in the consolidated balance sheet as of March 31, 2019, is shown below.

Undiscounted cash flows	$	15,683
Undiscounted cash flows associated with new lease effective 1/1/2020		(2,496	)
Discount effect of cash flows		(4,002	)
Total	$	9,185

On February 28, 2019, the Company entered into a new lease agreement with an effective date of January 1, 2020, which will result in an additional right-of-use asset and lease liability of approximately $2.0 million.