Leases:

On January 1, 2019, the Company adopted ASU 2016-02 "Leases" (Topic 842) and all subsequent updates that modified topic 842. For the Company, the adoption primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

Substantially all the leases for which the Company is the lessee are comprised of real estate for branches, mortgage, and operations locations. As of March 31, 2019, the Company had 39 operating leases with terms greater than one year to 37 years. Leases with initial terms of less than one year are not recorded on the balance sheet. The Company elected not to include equipment leases and leases in which the Company is the lessor on the consolidated balance sheets as these are not material.

Most leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew are included in the ROU asset and lease liability.

Information related to the Company's operating leases is presented below:



	March 31,
	2019
Right-of-use assets	$	32,694
Lease liabilities	35,093
Weighted average remaining lease term (in years)	15.65
Weighted average discount rate	3.48		%

The components of lease expense included in Occupancy and equipment expense were as follows:



	Three Months Ended
	March 31,
	2019
Operating lease cost	$	1,112
Short-term lease cost	224
Variable lease cost	100
Total lease cost	$	1,436

As the Company elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

Lease expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $1,229.

A maturity analysis of operating lease liabilities and a reconciliation of undiscounted cash flows to the total operating lease liability is as follows:



	March 31,
	2019
Lease payments due on or before:
March 31, 2020	$	4,670
March 31, 2021	4,604
March 31, 2022	4,308
March 31, 2023	3,332
March 31, 2024	3,176
Thereafter	27,065
Total undiscounted cash flows	47,155
Discount on cash flows	(12,062		)
Total lease liability	$	35,093