Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

9. Leases

The Company is obligated under various lease agreements for its branch office and certain equipment. These agreements are accounted for as operating leases and their terms expire between 2022 and 2025 and, in some instances, contain options to renew for periods up to four years. The Company has no financing leases.

The Company adopted ASU 2016-02 – Leases (Topic 842) – on January 1, 2022 and began recognizing its operating leases on its consolidated balance sheet by recording a net lease liability, representing the Company’s legal obligation to make these lease payments, and a Right-Of-Use (“ROU”) asset, representing the Company’s legal right to use the leased assets. The Company, by policy, does not include renewal options for leases as part of its ROU asset and lease liabilities unless they are deemed reasonably certain to exercise. The Company does not have any sub-lease agreements.

The following table summarizes information related to the Company’s right-of-use asset and net lease liability:

	March 31, 2022
	Operating Leases		Balance Sheet Location
	(Dollars in thousands)
Right-of-use asset	$	65	Other Assets
Net lease liability		65	Other Liabilities

The Company determines whether a contract contains a lease based on whether a contract, or a part of a contract, conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The discount rate is either implicit in the lease or, when a rate cannot be readily determined, the Company’s incremental borrowing rate is used.  The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term.

The components of operating lease cost and other related information are as follows:

	The three months ended March 31, 2022
	(Dollars in thousands)
Operating lease cost	$	12
Short-term lease cost		—
Variable lease cost (Cost excluded from lease payments)		—
Sublease income		—
Total operating lease cost		12
Other Information:
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows from operating leases		12
Operating lease - operating cash flows (liability reduction)	$	—
Weighted average lease term	2.0 years
Weighted average discount rate		2.46	%

The total minimum lease payments due in future periods for lease agreements in effect at March 31, 2022 were as follows:

The three months ended March 31, 2022	Future Minimum Lease Payments
	(Dollars in thousands)
Remainder of 2022	$	37
2023		16
2024		10
2025		4
2026		—
Thereafter		—
Total minimum lease payments		67
Less: interest		(2	)
Total lease liability		65

One of the Company’s lease agreements contain clauses calling for escalation of minimum lease payments contingent on increases in LIBOR, or a similar replacement index, and the consumer price index.