PREMISES AND EQUIPMENT

9 Months Ended

Sep. 30, 2020

NOTE 5 – PREMISES AND EQUIPMENT

The Company leases certain banking facilities and equipment under various agreements with original terms provide for fixed monthly payments over periods generally ranging from two to sixteen years, including renewal options. Certain leases contain renewal options and rent escalation clauses calling for rent increases over the term of the lease. Short-term leases of equipment are recognized on a straight-line basis over the lease term. As of September 30, 2020, the weighted average remaining lease term for operating leases was 8.8 years and the weighted average discount rate used in the measurement of operating lease liabilities was 0.85%.

Total lease expense for the nine months ended September 30, 2020, which is included in net occupancy and equipment expense, was $1,012,000, consisting of $113,000 short-term lease expense and $899,000 of operating lease expense. For the three months ended September 30, 2020, lease expense was $339,000, consisting of $39,000 short-term lease expense and $300,000 of operating lease expense.

Total lease expense for the nine months ended September 30, 2019, which is included in net occupancy and equipment expense, was $922,000, consisting of $75,000 short-term lease expense and $847,000 of operating lease expense. For the three months ended September 30, 2019, lease expense was $300,000, consisting of $27,000 short-term lease expense and $273,000 of operating lease expense.

The following table summarizes the future minimum rental commitments under operating leases:

2020	$	279
2021		1,067
2022		1,050
2023		805
2024		680
2025 and Thereafter		3,494
Total undiscounted cash flows		7,375
Discounted cash flows		(375	)
Total lease liability	$	7,000