NOTE 5: Leases

The Corporation’s leases comprise primarily leases of real estate and office equipment in which the Corporation is the lessee, and all of which are classified as operating leases. Lease cost for the three and nine months ended September 30, 2019 is set forth in the table below.


	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2019		September 30, 2019
Operating lease cost	$	422	$	1,256
Short-term lease cost		30		98
Variable lease cost		19		37
Total lease cost	$	471	$	1,391

Variable lease payments primarily represent payments for common area maintenance related to real estate leases and taxes and fees related to equipment leases.

Cash paid for amounts included in the measurement of lease liabilities during the three and nine months ended September 30, 2019 were $427,000 and $1.16 million, respectively. As of September 30, the weighted average remaining lease term and discount rate for the Corporation’s leases were 3.0 years and 3.3%, respectively. Right-of-use assets and lease liabilities of $3.17 million each were included in other assets and other liabilities, respectively, as of September 30, 2019. During the three and nine months ended September 30, 2019, the Corporation obtained right-of-use assets in exchange for lease liabilities of $72,000 and $1.12 million, respectively.

The Corporation adopted ASC 842 effective January 1, 2019. Prior to January 1, 2019, the Corporation measured lease expense in accordance with FASB Accounting Standards Codification (ASC) Topic 840. During the three and nine months ended September 30, 2018, the Corporation recognized lease expense of $344,000 and $1.28 million, respectively.

Certain of the Corporation’s leases contain options to extend the lease term beyond the initial term. Options to extend the lease term are recognized as part of the Corporation’s lease liabilities and right-of-use assets at the commencement of a lease to the extent the Corporation is reasonably certain to exercise such options.

Maturities of the Corporation’s lease liabilities are set forth in the table below.


	As of
(Dollars in thousands)	September 30, 2019
2019	$	282
2020		1,497
2021		902
2022		288
2023		126
Thereafter		225
Total		3,320
Imputed interest		(149)
Lease liabilities	$	3,171

The table above excludes payments of $4.94 million related to two lease agreements that have been executed where the Corporation has not obtained control of the real estate properties under lease as of September 30, 2019 and has therefore not recognized a lease liability or right-of-use asset.