Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2020
Leases [Abstract]  


Operating leases in which the Company is the lessee are recorded as operating lease right of use (“ROU”) assets and operating liabilities, included in other assets and liabilities, respectively, on its consolidated statement of financial condition.

Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the consolidated statements of income.

The Company’s operating leases primarily relate to banking offices with remaining lease terms from 1 to 30 years. The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of Topic 842. Operating leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. At March 31, 2020, the operating lease ROU assets and liabilities were $6.7 million and $7.6 million, respectively. The Company does not have any finance leases or any significant lessor agreements.

Three Months Ended March 31,
(Dollars in Thousands) 2020 2019
Operating lease expense $ 156 $ 81
Short-term lease expense 79 35
Total lease expense $ 235 $ 116
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 160 $ 83
Right-of-use assets obtained in exchange for new operating lease liabilities 5,092 1,928
Weighted-average remaining lease term — operating leases (in years) 15.4 7.4
Weighted-average discount rate — operating leases 2.4% 2.9%

The table below summarizes the maturity of remaining lease liabilities:
(Dollars in Thousands) March 31, 2020
2020 $ 909
2021 1,193
2022 1,044
2023 672
2024 630
2025 and thereafter 4,840
Total $ 9,288
Less: Interest (1,667)
Present Value of Lease liability $ 7,621

At March 31, 2020, the Company had additional operating lease payments for a banking office (to be constructed) that have not yet commenced of $1.9 million based on the initial contract term of 15 years. Payments for the banking office are expected to commence after the construction period ends, which is expected to occur during the third quarter of 2021.

A related party is the lessor in an operating lease with the Company. The Company’s minimum payment is $0.2 million annually through 2024, for an aggregate remaining obligation of $0.9 million at March 31, 2020.