Note 8 - Leases

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Lessee, Leases [Text Block]

NOTE

8

:     

LEASES

As discussed in Note

18,

on

January 1, 2019,

the Company adopted ASU

2016

-

02,

“Leases”. The Company recorded initial balances during the quarter ending

March 31, 2019

for operating Right of Use (“ROU”) assets and liabilities of

$

9,655,304

.

Additionally, the Company recorded initial balances for financing ROU assets and liabilities of

$

481,830

.

As of

December 31, 2019,

operating lease liability balances were

$9,105,503

and financing lease liability amounts were

$438,580.

We maintain operating leases on land and buildings for certain branch facilities and our headquarters. Financing leases are primarily for equipment used at banking facilities. Most leases include options to renew, with renewal terms extending between

one

to

twenty

years. The exercise of renewal options is based on judgement of management as to whether or

not

the renewal option is reasonably certain to be exercised. Factors in determining whether or

not

the renewal option is reasonably certain to be exercised include, but are

not

limited to, the value of the leasehold improvements, the value of the renewal rate compared to market rates and the presence of factors that would cause significant economic penalty to the Company if the option is

not

exercised.

Expenses for finance leases are included in other interest expense and occupancy expense line items, whereas, operating leases are expensed entirely in the occupancy expense line item. Leases with a term of less than

twelve

months are

not

recorded on the balance sheet and are expensed on a straight-line basis over the lease term. Discount rates used for the purpose of valuing the leases were based on rates available to the Company on fixed rate borrowings for similar lease terms.

The components of lease expense and their impact on the statement of income as of

December 31, 2019

and

2018

is as follows:

	Year ended
	December 31,
	2019			2018
	(In Thousands)
Finance lease cost:
Amortization of right-of-use assets	$	111,559		$	-
Interest on lease liabilities		8,346			-
Operating lease cost		1,080,226			1,049,523
Sublease income		(45,200	)		-
Total lease costs	$	1,154,931		$	1,049,523

Additional lease information:
Weighted-average remaining lease term - financing leases (in years)	3.5
Weighted-average remaining lease term - operating leases (in years)	15.2
Weighted-average discount rate - financing leases	1.96	%
Weighted-average discount rate - operating leases	5.60	%

The following table sets forth the future minimum lease cash payments and a reconciliation of the undiscounted cash flows to the lease liability as of

December 31, 2019:

	Financing			Operating			Total
				(In Thousands)
2020	$	132		$	1,043		$	1,175
2021		132			1,020			1,152
2022		126			1,011			1,137
2023		53			1,014			1,067
2024		10			856			866
Thereafter		-			8,980			8,980
Total undiscounted future minimum lease cash payments	$	453		$	13,924		$	14,377
Present value discount		(14	)		(4,818	)		(4,832	)
Lease liability	$	439		$	9,106		$	9,545

Future minimum lease cash payments under non-cancelable operating leases as of

December 31, 2018,

prior to adoption of ASU

2016

-

02,

were as follows:

	December 31, 2018
	(In Thousands)
2019	$	1,032
2020		993
2021		964
2022		962
2023		956
Thereafter		3,573
	$	8,480