On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), using the optional transition method permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements.

The Company’s operating leases are real estate leases which are comprised of its headquarters and office facilities from nonaffiliated parties with remaining lease terms ranging from 1 to 10 years as of September 30, 2019. Certain lease arrangements contain extension option which are typically around 5 years. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term.

At September 30, 2019, operating right-of-use (“ROU”) assets and related liabilities were $8.6 million and $10.3 million, respectively. Short-term operating leases, which are defined as leases with term of twelve months or less, were not recognized as ROU assets with related lease liabilities as permitted under ASU No. 2016-02. The lease payments on short-term operating leases are immaterial. The Company did not have any finance leases at September 30, 2019.

Operating lease ROU assets represent the Company’s right to use the underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the lease commencement based on the present value of the remaining lease payments using the Company’s incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy expense in the consolidated statements of income. The Company’s occupancy expense also includes variable lease costs which is comprised of the Company's share of actual costs for utilities, common area maintenance, property taxes, and insurance that are not included in lease liabilities and are expensed as incurred. Variable lease costs can also include rent escalations based on changes to indices, such as the Consumer Price Index, where the Company estimates future rent increases and records the actual difference to variable costs.

	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2019		September 30, 2019
Operating lease cost	$	444	$	1,287
Variable lease cost		211		548
Total lease cost	$	655	$	1,835

The table below summarizes other information related to the Company’s operating leases:

	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	493	$	1,408
Weighted average remaining lease term - operating leases			6.0 years
Weighted average discount rate - operating leases				2.98	%

Rent expense was $655,000 and $545,000 for the three months ended September 30, 2019 and 2018, respectively, and $1.8 million and $1.6 million for the nine months ended September 30, 2019 and 2018, respectively.

The table below summarizes the remaining contractually obligated lease payments and a reconciliation to the lease liability reported on the consolidated balance sheet as of September 30, 2019:

(Dollars in thousands)	September 30, 2019
2019 remaining	$	301
2020		2,002
2021		2,032
2022		2,028
2023		1,816
Thereafter		3,343
Total lease payments		11,522
Discount to present value		(1,187	)
Total lease liability	$	10,335

Rent commitments related to the lease of the Company’s main office and branch facilities, before considering renewal options and additional lessor charges as of December 31, 2018, were as follows:

(Dollars in thousands)	December 31, 2018
2019	$	1,709
2020		1,757
2021		1,742
2022		1,685
2023		1,455
Thereafter		2,669
Total	$	11,017