Note 11 - Leases

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(

11

)

Leases

The Company accounts for its leases in accordance with

ASU

2016

-

02,

Leases (Topic

842

)

and as of

September 30, 2020,

a

$3.4

million right-of-use asset and an offsetting lease payment obligation liability were recorded on the consolidated balance sheets in other assets and other liabilities, respectively.

Operating lease right-of-use assets represent the Company's right to use an underlying asset during the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Right-of-use 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 the Company's incremental borrowing rate at the lease commencement date. Because the Company only has operating leases and the right-of-use asset is offset by a lease payment obligation liability, the lease payments are the only amount that is recorded in occupancy expense in the consolidated statements of comprehensive income.

The Company's leases relate to office space and bank branches with remaining lease terms between

22

and

54

months. Certain leases contain extension options which typically range from

3

to

10

years. Because these extension options are

not

considered reasonably certain of exercise, they are

not

included in the lease term.

The table below summarizes the Company's net lease cost:

(Dollars in thousands)	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Operating lease cost	$	224		669

The table below summarizes other information related to the Company's operating leases:

(Dollars in thousands)	Three Months Ended September 30, 2020			Three Months Ended September 30, 2019			Nine Months Ended September 30, 2020			Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	224			221			669			667
Weighted-average remaining lease term – operating leases, in years		3.9			5.0			3.9			5.0
Weighted-average discount rate – operating leases		2.19	%		2.19	%		2.19	%		2.19	%

The table below summarizes the maturities of remaining lease liabilities:

(Dollars in thousands)	September 30, 2020
2020	$	222
2021		902
2022		924
2023		802
2024		667
2025 and thereafter		11
Total lease payments		3,528
Less: Interest		(153	)
Present value of lease liabilities	$	3,375