Leases (Notes)

3 Months Ended

Mar. 31, 2019

LEASES

The Company adopted the new lease accounting standard ("the lease standard") under Accounting Standards Codification Topic 842 ("ASC 842") using the modified retrospective transition method with an effective date as of January 1, 2019. Therefore, periods prior to to that date were not restated, and are not presented below. The Company elected the package of practical expedients, which permits the Company not to reassess prior conclusions about lease identifications, lease classification and initial direct costs. The Company has elected the short-term lease recognition exemption for all leases that qualify. The Company did not elect to apply the hindsight practical expedient pertaining to using hindsight knowledge as of the effective date when determining lease terms and impairment.

The Company leases office space, space for ATM locations and certain branch locations under noncancelable operating leases. As of March 31, 2019, the Company has entered into 73 noncancelable operating lease agreements. Several of the Company's leases for office space, space for ATM locations and certain branch locations contain renewal options to extend lease terms for a period of 2 to 10 years. The Company makes the decision on whether or not to renew an option to extend a lease by considering various factors. The Company will recognize an adjustment to its ROU asset and lease liability when lease agreements are amended and executed. The discount rate used in determining the present value of lease payments is based on the Company's incremental borrowing rate for borrowings with terms similar to each lease at commencement date. The Company has no financing leases outstanding and no leases with residual value guarantees.

As of March 31, 2019, the Company had one lease on a branch location where the location is subleased from a non-related party, and one ATM location lease with a non-employee related party. The future lease payments under these leases do not have a material effect on the Company's financial position or result of operations.

The Company's right-of-use asset related to operating leases was $33.7 million at March 31, 2019.

The following table provides information related to the Company's lease cost.



	Three Months Ended
	March 31, 2019
	(Dollars in thousands)

Operating lease cost	$2,111
Short-term lease cost	39
Variable lease cost	—
Total lease cost	$2,150

For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 6.60 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.07%.

The following table sets forth the undiscounted cash flows of base rent related to operating leases outstanding at March 31, 2019 with payments scheduled over the next five years and thereafter, including a reconciliation to the operating lease liability recognized in the Company's Consolidated Balance Sheet.



	(Dollars in thousands)

2019	$	6,301
2020	7,725
2021	6,751
2022	5,598
2023	3,563
Thereafter	9,246
Total minimum lease payments	$	39,184
Less: amount representing interest	4,090
Present value of future minimum lease payments	$	35,094