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. See Note 1 “Summary of Significant Accounting Policies” for additional information regarding adoption of ASU No. 2016-02.

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 December 31, 2020. 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 December 31, 2020 and December 31, 2019, operating right-of-use (“ROU”) assets were $6.8 million and $8.3 million, respectively, and related liabilities were $8.4 million and $10.1 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 December 31, 2020 and December 31, 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 least 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.

The table below summarized the Company’s total lease cost for the periods indicated:

(Dollars in thousands)	Year Ended December 31, 2020		Year Ended December 31, 2019
Operating lease cost	$	1,769	$	1,731
Variable lease cost		774		728
Total lease cost	$	2,543	$	2,459

The table below summarizes other information related to the Company’s operating leases as of the associated period:

(Dollars in thousands)	Year Ended December 31, 2020			Year Ended December 31, 2019
Operating right-of-use assets	$	6,786		$	8,254
Operating lease liabilities		8,429			10,126

Weighted average remaining lease term - operating leases	5.0 years			5.7 years
Weighted average discount rate - operating leases		2.99	%		2.98	%

(Dollars in thousands)

Year Ended

December 31, 2020

Year Ended

December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

2,005

1,902

Rent expense was $2.5 million for the years ended December 31, 2020 and 2019, and $2.1 million for the year ended December 31, 2018.

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 December 31, 2020:

(Dollars in thousands)	December 31, 2020
2021	$	2,047
2022		2,033
2023		1,811
2024		1,700
2025		676
Thereafter		956
Total lease payments		9,223
Discount to present value		(794	)
Total lease liability	$	8,429