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 September 30, 2019, the Company had 42 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:



	September 30,
	2019
Right-of-use assets	$	34,812
Lease liabilities	37,760
Weighted average remaining lease term (in years)	14.43
Weighted average discount rate	3.46		%

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



	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Operating lease cost	$	1,260	$	3,875
Short-term lease cost	81		239
Variable lease cost	146		580
Total lease cost	$	1,487	$	4,694

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 and nine months ended September 30, 2018, prior to the adoption of ASU 2016-02, was $1,295 and $3,786, respectively.

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



	September 30,
	2019
Lease payments due on or before:
September 30, 2020	$	5,537
September 30, 2021	5,244
September 30, 2022	4,523
September 30, 2023	3,996
September 30, 2024	3,578
Thereafter	26,396
Total undiscounted cash flows	49,274
Discount on cash flows	(11,514		)
Total lease liability	$	37,760