LEASES

As of January 1, 2019, the Company adopted ASU 2016-02 (Topic 842) on a prospective basis using the effective date method. The adoption of the new standard did not have a material impact on MidSouth's financial statements; however, additional disclosures have been added in accordance with the ASU. See Note 2 for additional information on this new accounting standard.

We have operating leases for branches and corporate offices. Our leases have remaining lease terms from 1 to 40 years, some of which have options to extend the leases up to 5 years, and some which include options to terminate the leases within 1 year. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight -line basis over the lease term. We rent or sublease certain real estate to third parties.

The following is a summary of net lease cost and other selected information related to operating leases (cost, in thousands):



	Three Months Ended March 31, 2019
Net lease cost:
Operating lease cost	$	466
Variable lease cost	(43		)
Sub lease income	(44		)
Net lease cost	$	379
Weighted average remaining lease term (years)	14
Weighted average discount rate	3.4		%

Maturities of leases payments, undiscounted cash flow, lease liability were as follows (in thousands):



	Lease Payments		Undiscounted Cash Flow		Lease Liability
2019	$	1,817	$	250	$	1,567
2020	1,820		196		1,624
2021	1,060		149		911
2022	518		132		386
2023	351		122		229
Thereafter	5,160		1,674		3,486
	$	10,726	$	2,523	$	8,203