Leases (Notes)

6 Months Ended

Jun. 30, 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 June 30, 2019, the Company has entered into 92 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 1 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. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

As of June 30, 2019, the Company had two leases on branch locations 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 $51.5 million at June 30, 2019 and is recognized in the Company's Consolidated Balance Sheet in other assets.

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



	Three Months Ended	Six Months Ended
	June 30, 2019
	(Dollars in thousands)

Operating lease cost	$2,825	$4,936
Short-term lease cost	4	43
Variable lease cost	—	—
Total lease cost	$2,829	$4,979

As of June 30, 2019, the weighted average remaining lease term for operating leases was 6.99 years and the weighted average discount rate used in the measurement of operating lease liabilities was 2.99%.

The following table sets forth the undiscounted cash flows of base rent related to operating leases outstanding at June 30, 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 in other liabilities.



	(Dollars in thousands)

Remainder of 2019	$	5,616
2020	10,569
2021	9,487
2022	8,402
2023	6,396
Thereafter	18,799
Total minimum lease payments	$	59,269
Less: amount representing interest	6,162
Present value of future minimum lease payments	$	53,107