The right-of-use assets and lease liabilities are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets.

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. The incremental borrowing rate was equal to the rate of borrowing from the FHLB that aligned with the term of the lease contract. 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.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

Cash paid for amounts included in the measurement of lease liabilities during the twelve months ended December 31, 2021 was $590,000 and $399,000 for the same period in 2020. During twelve months ended December 31, 2021 and 2020, the Company recognized lease expense of $693,000 and $590,000, respectively.

	As of December 31,
(Dollars in thousands)	2021			2020
Lease liabilities	$	7,753		$	6,607
Right-of-use assets	$	7,154		$	6,195
Weighted-average remaining lease term – operating leases (in months).		173.2			187.5
Weighted-average discount rate – operating leases		2.81	%		3.12	%

	For the year ended December 31,
(Dollars in thousands)	2021			2020
Lease Cost
Operating lease cost	$	693		$	590
Total lease costs	$	693		$	590
Cash paid for amounts included in measurement of lease liabilities	$	590		$	399

The Company is the lessor for three operating leases. One lease is extended on a month-to-month basis while two of these leases have arrangements for over twelve months with an option to extend the lease terms. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. Total rent income on these operating leases is approximately $6,000 per month.

As of December 31, 2021, all of the Company’s lease obligations are classified as operating leases. The Company does not have any finance lease obligations.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities as of December 31, 2021 is as follows:

(Dollars in thousands)
2022	$	607
2023		638
2024		654
2025		671
2026		689
Thereafter		6,268
Total undiscounted cash flows		9,527
Discount		(1,774	)
Lease liabilities	$	7,753