Note 23. Leases

On January 1, 2019, the Company adopted FASB ASU 2016-02, Leases (Topic 842), as it relates to its non-cancellable operating leases and subleases of bank premises. The guidance was implemented using the modified retrospective transition approach at the date of adoption with no cumulative effect adjustment to opening retained earnings and no material impact on the measurement of operating lease costs. Prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historical accounting policies, resulting in a balance sheet presentation that is not comparable to the prior period in the first year of adoption. The Company elected the practical expedient package, which allowed it to not reassess (1) whether expired or existing contracts are or contain a lease, (2) the lease classification of expired or existing leases, and (3) the initial direct costs for any existing leases. The Company also elected the practical expedient to use hindsight in determining the lease term for existing leases, thereby including renewal options that the Company is reasonably certain will be exercised in the lease term. The adoption of this ASU resulted in the recognition of operating lease assets of $7.4 million and lease liabilities of $7.6 million at January 1, 2019.

The Company's leases have lease terms between five years and 20 years, with the longest lease term having an expiration date in 2038. Most of these leases include one or more renewal options for five years or less. At lease commencement, the Company assesses whether it is reasonably certain to exercise a renewal option by considering various economic factors. Options that are reasonably certain of being exercised are factored into the determination of the lease term, and related payments are included in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate to calculate the present value of lease payments when the interest rate implicit in a lease is not disclosed. None of the Company’s current leases contain variable lease payment terms. The Company accounts for associated non-lease components separately.

The following table presents operating lease liabilities at December 31, 2019 (dollars in thousands):



	December 31, 2019
Gross lease liability	$	9,278
Less: imputed interest		(2,541)
Present value of lease liability	$	6,737

The weighted average remaining lease term and weighted average discount rate for operating leases at December 31, 2019 was 12.0 years and 4.63%, respectively. Maturities of the gross operating lease liability at December 31, 2019 are as follows (dollars in thousands):


2020	$	1,231
2021		1,191
2022		600
2023		630
2024		573
Thereafter		5,053
Total of future payments	$	9,278

Operating lease costs and sublease rental income for the year ended December 31, 2019 were $1.5 million and $191,000, respectively. Included in operating lease costs was $138,000 for the year ended December 31, 2019, related to the early termination of an unprofitable branch recognized on June 30, 2019. Rental expense and sublease rental income under operating lease agreements for the year ended December 31, 2018 were $1.4 million and $109,000, respectively.