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 December 31, 2019, the Company had 36 operating leases with terms greater than one year to 36 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:



	December 31,
	2019
Right-of-use assets	$	32,539
Lease liabilities	35,525
Weighted average remaining lease term (in years)	14.07
Weighted average discount rate	3.44		%

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



	Year Ended
	December 31, 2019
Operating lease cost ⁽¹⁾	$	5,057
Short-term lease cost	365
Variable lease cost	682
Total lease cost	$	6,104

(1) Includes amortization of favorable lease intangible

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. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

Prior to the adoption of ASU 2016-02, lease expense and amortization of the favorable lease intangible included in occupancy and equipment expense during the year ended December 31, 2018 amounted to $5,019 and $90, respectively.

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



	December 31,
	2019
Lease payments due on or before:
December 31, 2020	$	5,465
December 31, 2021	4,979
December 31, 2022	4,161
December 31, 2023	3,805
December 31, 2024	3,307
Thereafter	24,333
Total undiscounted cash flows	46,050
Discount on cash flows	(10,525		)
Total lease liability	$	35,525