17) Leases

On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842). Under the new guidance, the Company recognizes the following for all leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company is impacted as a lessee of the offices and real estate used for operations. The Company's lease agreements include options to renew at the Company's option. No lease extensions are reasonably certain to be exercised, therefore it was not considered in the calculation of the ROU asset and lease liability. As of March 31, 2020, operating lease ROU assets, included in other assets, and lease liabilities, included in other liabilities, totaled $38,098,000.

The following table presents the quantitative information for the Company’s leases:


		March 31,
		2020
	(Dollars in thousands)
Operating Lease Cost (Cost resulting from lease payments)	$	1,769
Operating Lease - Operating Cash Flows (Fixed Payments)	$	1,190
Operating Lease - ROU assets	$	38,098
Operating Lease - Liabilities	$	38,098
Weighted Average Lease Term - Operating Leases		8.64 years
Weighted Average Discount Rate - Operating Leases		4.52%

The following maturity analysis shows the undiscounted cash flows due on the Company’s operating lease liabilities:


	(Dollars in thousands)
2020	$	4,420
2021		5,029
2022		5,448
2023		4,812
2024		4,575
Thereafter		22,663
Total undiscounted cash flows		46,947
Discount on cash flows		(8,849)
Total lease liability	$	38,098

The merger with Presidio resulted in the Company operating overlapping branch locations in the cities of Walnut Creek and San Mateo, California. Management has approved the consolidation of these branches in 2020 by vacating the HBC leased locations prior to the lease termination date, and moving the operations to the Presidio branch locations. The consolidation of these two branches into the Presidio locations resulted in the impairment of both leases at December 31, 2019. The lease impairment and write-off of fixed assets and tenant improvements totaled $434,000 for the Walnut Creek location, and $625,000 for the San Mateo location during the fourth quarter of 2019.

In June of 2019, the Company entered into a lease agreement for 54,910 square feet of office space in San Jose, California, commencing on February 1, 2020. The Company was able to complete the move of its Bay View Funding office during the first quarter of 2020, and we had intended to move the main office of the Company during the second quarter of 2020 to this new location. However, due to delays and restrictions created by California’s and Santa Clara County’s Shelter-in-Place declarations because of the Coronavirus, we must delay the move to later in the year. The financial effects of this delay cannot be determined at this time.