NOTE 6 - LEASES

On January 1, 2019, the Company adopted FASB issued ASU No. 2016-02, “Leases (Topic 842).” Leases (Topic 842) establishes a right of use model that requires a lessee to record a right of use (“ROU”) asset and a lease liability for all leases with terms longer 12 months. As of the adoption date, the Company was obligated under six operating leases. In the second quarter of 2019, the Company entered into one new operating lease for land in Lexington, KY which will be used to construct a new branch building on. As of December 31, 2019, the Company is obligated under seven operating leases, three of which are for building leases and four of which are for land leases, with terms extending through 2078. The Company's lease agreements include options to renew at the Company's discretion. The extensions are reasonably certain to be exercised with the exception of one lease agreement which expires in 2020 and is for additional office space. As of December 31, 2019, we do not intend to exercise the option to renew this lease and assumptions used in estimating our operating lease right of use asset and operating lease liability were updated accordingly. In first and second quarter filings during 2019, we did assume we would renew the lease. The change in assumptions had minimal impact on the recorded lease estimates recorded on the Company’s balance sheet. The lease agreements with options that we are reasonably certain will be exercised were considered in the calculation of the ROU asset and lease liability.



	Statement of
	Financial Condition
	Location	December 31, 2019
			(in thousands)
Operating Lease Right of Use Asset:
Gross Carrying Amount		$	8,857
Accumulated Amortization			(662)
Net Book Value	Operating lease right of use asset	$	8,195

Operating Lease Liabilities
Right of use lease obligations	Operating lease liability	$	8,350

As of December 31, 2019, the weighted-average remaining lease term for operating leases was 35.4 years and the weighted- average discount rate used in the measurement of operating lease liabilities was 4.13%. The Company utilized the FHLB fixed rate advance rate as of December 31, 2018 for the term most closely aligning with the remaining lease term for lease obligations in existence as of December 31, 2018. The Company utilized the FHLB fixed rate advance rate as of April 30, 2019 as a basis for determing the discount rate for one contract which was entered into during April 2019.


	Year Ended
	December 31, 2019
		(in thousands)
Lease Cost:
Operating lease cost	$	662
Total lease cost	$	662

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	350

Maturity analysis of liabilities under operating leases with terms longer than 12 months, are as follows at December 31, 2019:


	As of December 31, 2019
		(in thousands)
Twelve months ended September 30,
2020	$	533
2021		521
2022		527
2023		531
2024		545
Thereafter		18,847
Total undiscounted lease payments	$	21,504
Amounts representing interest		(13,154)
Lease liability	$	8,350