NOTE 7 — Leases

As of January 1, 2019, the Company recognizes the present value of its operating lease payments related to its office facilities and retail branch as operating lease assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. These operating lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at the lease commencement date in order to determine present value.

Short-term lease payments, those leases with original terms of 12 months or less, are recognized in the Consolidated Statements of Income, on a straight-line basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options is typically at the Company’s discretion and are included in the operating lease liability if it is reasonably certain that the renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not included in the measurement of the lease liability since they are generally able to be segregated. The Company does not sublease any of its leased properties. The Company does not lease properties from any related parties.

As of March 31, 2020, right of use (“ROU”) lease assets and related lease liabilities were $3.1 million and $3.8 million, respectively.

Maturities of the Company’s operating lease liabilities at March 31, 2020 are as follows:


		Operating Lease
		Liabilities
		(In thousands)
2020	$	449
2021		605
2022		620
2023		636
2024		652
Thereafter		1,295
Total operating lease payments	$	4,257
Less: interest		490
Present value of operating lease liabilities	$	3,767



	As of and for the three months ended
	March, 31
	2020			2019
	(Dollars in thousands)
Operating lease cost	$	140		$	120
Cash paid for operating lease liability		132			128
Weighted-average remaining lease term		6.65	years		7.58	years
Weighted-average discount rate		3.10	%		3.28	%