Note

. Commitments and Contingencies

Leases

FNCB is obligated under operating leases for certain bank branches, office space, automobiles and equipment. Operating lease right of use ("ROU") assets represent FNCB's right to use an underlying asset during the lease term and operating liabilities represent our obligation to make lease payments under the lease agreement. 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 FNCB's incremental borrowing rate at the commencement date. ROU assets are included in other assets and operating lease liabilities are included in other liabilities in the consolidated statements of financial condition. As of

March 31, 2020

, ROU assets and lease liabilities were

3.1

million and

$3.4

million, respectively. There was

one

new automobile lease that commenced during the

three

months ended

March 31, 2020

. ROU assets and corresponding lease liabilities recorded for the new lease aggregated to

$16

thousand and

$18

thousand, respectively, during the

three

months ended

March 31, 2020

The following table summarizes the components of FNCB's operating lease expense for the

three

months ended

March 31,

2020

and

2019.

Operating lease expense associated with bank branches and office space is included in occupancy expense, while operating lease expense associated with automobiles and office equipment are included in equipment expense in the consolidated statements of income.

(in thousands)	Three Months Ended March 31, 2020		Three Months Ended March 31, 2019
Operating lease cost - bank branches	$	86	$	85
Operating lease cost - automobiles and equipment		8		2
Short-term lease cost - office space		9		15
Short-term lease cost - automobiles and equipment		4		3
Variable lease cost		-		-
Total lease cost	$	107	$	105

The following table summarizes the maturity of remaining operating lease liabilities as of

March 31, 2020

(in thousands)	March 31, 2020
2020	$	269
2021		361
2022		331
2023		323
2024		287
2025 and thereafter		2,813
Total lease payments		4,384
Less: imputed interest		981
Present value of operating lease liabilities	$	3,403

The following table presents other information related to our operating leases:

(dollars in thousands)	March 31, 2020
Weighted-average remaining lease term	14.08 years
Weighted-average discount rate		3.48	%
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	97

Litigation

FNCB has been subject to tax audits, and is also a party to routine litigation involving various aspects of its business, such as employment practice claims, workers compensation claims, claims to enforce liens, condemnation proceedings on properties in which FNCB holds security interests, claims involving the making and servicing of real property loans and other issues incident to its business,

none

of which has or is expected to have a material adverse impact on the consolidated financial condition, results of operations or liquidity of FNCB.