Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 30, 2019
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 statement of income.

The Company’s operating leases primarily relate to banking offices with remaining lease terms from 1 to 9 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 September 30, 2019, the operating lease ROU assets and liabilities were $1.8 million and $2.6 million, respectively. The Company does not have any finance leases or any significant lessor agreements.

Three Months Ended Nine Months Ended
(Dollars in Thousands) September 30, 2019 September 30, 2019
Operating lease expense $ 81 $ 243
Short-term lease expense 27 90
Total lease expense $ 108 $ 333
September 30, 2019
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 254
Right-of-use assets obtained in exchange for new operating lease liabilities 1,794
Weighted-average remaining lease term — operating leases (in years) 7.0
Weighted-average discount rate — operating leases 2.9%

The table below summarizes the maturity of remaining lease liabilities:
(Dollars in Thousands) September 30, 2019
2019 $ 107
2020 451
2021 420
2022 417
2023 398
2024 and thereafter 1,085
Total $ 2,878
Less: Interest (287)
Present Value of Lease liability $ 2,591

At September 30, 2019, the Company had additional operating lease payments for a banking office (to be constructed) that have not yet commenced of $1.4 million. Payments for the banking office are expected to commence after the construction period ends, which is expected to occur during the second quarter of 2020.

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 $1.0 million at September 30, 2019.