Leases

9 Months Ended

Sep. 30, 2020

The Company leases land and premises for its branch banking offices, administration facilities, and ATMs. The initial terms of these leases expire at various dates through 2025. Under the provisions of most of these leases, the Company has the option to extend the leases beyond their original terms at rental rates adjusted for changes reported in certain economic indices or as reflected by market conditions. Lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. As of September 30, 2020, the Company had 12 operating leases and no financing leases.

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(in 000's)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019



Operating lease expense	$	191	$	197	$	570	$	575

Variable lease expense	51		7		169		115

Total	$	242	$	204	$	739	$	690

Supplemental balance sheet information related to leases was as follows:


(in 000's)	September 30, 2020




Operating cash flows from operating leases	$	571

ROU assets obtained in exchange for new operating lease liabilities	—

Weighted-average remaining lease term in years for operating leases	5.86

Weighted-average discount rate for operating leases	5.15		%

Maturities of lease liabilities were as follows:


(in 000's)	September 30, 2020
2021	$	682
2022	661
2023	666
2024	562
2025	371
Thereafter	556
Total undiscounted cash flows	3,498
Less: present value discount	(481)
Present value of net future minimum lease payments	$	3,017