13. LEASES

The Company leases office space and certain computer and related equipment under noncancelable operating leases. The Company determines if an arrangement is a lease at the inception date of the contract. The Company measures operating lease liabilities using an estimated incremental borrowing rate as there is no rate implicit in the Company’s operating lease arrangements. An incremental borrowing rate was calculated for each operating lease based on the term of the lease, the U.S. Treasury term interest rate, and an estimated spread to borrow on a secured basis.

The Company adopted the provisions of ASC 842 effective January 1, 2019. At adoption, the Company elected to not restate prior periods and rather record a cumulative effect of accounting change effective January 1, 2019. The Company recorded the following: (a) a right of use asset of $8,416, (b) a lease commitment liability of $8,860, (c) a reduction in retained earnings from cumulative effect of adoption of $20, (d) an increase in other receivables of $18, and (e) a reduction in other liabilities of $406.

Rent expense is recognized on a straight-line basis over the lease term and is in included business development, occupancy, and equipment expense.

As of March 31, 2020, all of the leases to which the Company was a party were operating leases. The weighted average remaining term of the leases was 8.2 years. The weighted average discount rate for the leases was 5.36%.

Maturities of operating lease liability payments consisted of the following.



FUTURE MATURITY OF LEASE LIABILITIES
(Dollars in Thousands)


		As of March 31, 2020
2020 - remaining	$	1,161
2021		1,108
2022		933
2023		950
2024		983
Thereafter		4,094
Total		9,229
Less imputed interest		(1,838)
Lease obligation	$	7,391

During the three months ended March 31, 2020, total cash payments of $403 were recorded as a reduction in the operating lease obligation. No cash payments were made to acquire right of use assets. For the three months ended March 31, 2020 and 2019, rent expense, net of sublease income of $79 and $65, was $378 and $390, respectively.