Note 6 Leases

The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019. As a result of the adoption, the Company recorded lease right-of-use (“ROU”) assets and lease liabilities of $30.5 million with a cumulative effect adjustment to beginning retained earnings of $0.3 million. As of March 31, 2019, right-of-use lease assets and related lease liabilities totaled $29.4 million and were included within other assets and other liabilities, respectively, on the consolidated statements of financial condition.

The ROU assets represent the Company’s right to use, or control the use of, an underlying asset for the lease term and the lease liabilities represent the Company’s obligation to make lease payments arising from the lease terms. The updates did not significantly change lease accounting requirements applicable to lessors and did not significantly impact our financial statements in relation to contracts whereby we act as a lessor.

The Company has operating leases for banking centers, corporate offices and ATMs, with remaining lease terms ranging from one year to 9 years. The Company only included reasonably certain renewal options in the lease terms. The weighted-average remaining lease term for our operating leases was 5.3 years at March 31, 2019. As of March 31, 2019, the weighted-average discount rate was 3.42%, utilizing the Company’s incremental FHLB borrowing rate for borrowings of a similar term at the date of lease commencement.

Rent expense totaled $1.4 million for the three months ended March 31, 2019 and was recorded within occupancy and equipment on the consolidated statements of operations. Lease payments do not include non-lease components such as real estate taxes, insurance, and common area maintenance.

Below is a summary of undiscounted future minimum lease payments as of March 31, 2019 per ASC Topic 842, Leases:


	Amount
For the nine months ending December 31, 2019	$	4,295
For the year ending December 31, 2020		5,172
For the year ending December 31, 2021		4,843
For the year ending December 31, 2022		4,324
For the year ending December 31, 2023		3,921
Thereafter		16,570
Total lease payments		39,125
Less: Imputed interest		9,719
Present value of operating lease liabilities	$	29,406

Below is a summary of undiscounted future minimum lease payments as of December 31, 2018 per ASC Topic 840, Leases:


Years ending December 31,	Amount
2019	$	3,092
2020		2,981
2021		3,091
2022		3,052
2023		2,047
Thereafter		10,163
Total	$	24,426