On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Company elected the prospective application approach and did not adjust prior periods. There was no cumulative effect adjustment at adoption. The Company also elected certain practical expedients within the standard and did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases and did not reassess any initial direct costs for existing leases. Prior to adoption, all of the Company’s leases were classified as operating leases and remain operating leases at adoption. The implementation of the new standard resulted in recognition of a right-of-use asset and offsetting lease liability of $5.6 million for leases existing at the date of adoption.

Contracts that commence subsequent to adoption are evaluated to determine whether they are or contain a lease in accordance with this ASU. The Company has elected the practical expedient provided by this ASU not to allocate consideration in a contract between lease and non-lease components. The Company also elected, as provided by the standard, not to recognize right-of-use assets and lease liabilities for short-term leases, defined by the standard as leases with terms of 12 months or less.

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term. Payments for leases with terms longer than twelve months are included in the determination of the lease liability. Each of the Company’s three leases offer the option to extend the lease term and include a known escalator which is included in the cash flows used to determine the lease liability.

None of the Company’s leases provide for residual value guarantees and none provide restrictions or covenants that would impact dividends or require incurring additional financial obligations. The contracts in which the Company is lessee are with parties external to the Company and not related parties.

The following tables present information about the Company’s leases at the dates indicated:

(Dollars in thousands)	September 30, 2019
Lease liability	$	5,188
Right-of-use asset	$	5,180
Weighted average remaining lease term	8.98 years
Weighted average discount rate		3.54	%

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2019		2018		2019		2018
Lease Expense
Operating lease expense	$	200	NR^*		$	610	NR^*
Short-term lease expense		5	NR^*			11	NR^*
Total lease expense	$	205	$	175	$	621	$	521

Cash paid for amounts included in lease liabilities	$	165	NR^*		$	533	NR^*

*Not reportable

The following table presents a maturity schedule of undiscounted cash flows that contribute to the lease liability at September 30, 2019:

(In thousands)
Undiscounted Cash Flow	September 30, 2019
Three months ending December 31, 2019	$	111
Twelve months ending December 31, 2020		670
Twelve months ending December 31, 2021		682
Twelve months ending December 31, 2022		694
Twelve months ending December 31, 2023		707
Twelve months ending December 31, 2024		646
Thereafter		2,603
Total undiscounted cash flows	$	6,113
Less: Discount		(925	)
Lease liability	$	5,188