Operating leases in which we are the lessee are recorded as operating lease right of use (“ROU”) assets and operating lease liabilities, included in premises and equipment and other liabilities, respectively, on our consolidated balance sheets. Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental collateralized borrowing rate at the lease commencement date. ROU assets are further adjusted for the lease incentives. Operating lease expense, which is composed of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in the net occupancy expense in the consolidated statements of income. We do not currently have any finance leases in which we are the lessee.

Our leases relate to three office locations, two of which are branch locations, with remaining terms of four to seven years. Certain lease arrangements contain extension options which range from five to ten years at the then fair market rental rates. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term. As of March 31, 2022, operating lease ROU assets were $2.0 million and the lease liability was $2.1 million, compared to ROU assets of $2.4 million and a lease liability of $2.5 million at March 31, 2021. Lease costs associated with all leases was $99,000 for both three-month periods ended March 31, 2022 and 2021.

	Three Months Ended March 31,
	2022			2021
	(in thousands except percent and period data)

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	99		$	96
Right-of-use assets obtained in exchange for new operating lease liabilities		2,015			2,354
Weighted-average remaining lease term - operating leases, in years		5.6			6.6
Weighted-average discount rate - operating leases		2.47	%		2.45	%


	March 31, 2022
	(in thousands)

2022	$	301
2023		408
2024		417
2025		427
2026		387
2027 and thereafter		365
Total lease payments		2,305
Less: Interest		(164	)
Present value of lease liabilities		2,141