Leases (Notes)

9 Months Ended

Sep. 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 September 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 September 30, 2019, the Company had one ATM location lease with a non-employee related party. The future lease payments under this lease do not have a material effect on the Company's financial position or result of operations. The Company does not have any material sub-lease agreements.

The Company's right-of-use asset related to operating leases was $51.8 million at September 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	Nine Months Ended
	September 30, 2019
	(Dollars in thousands)
Operating lease cost	$2,881	$7,817
Short-term lease cost	39	82
Variable lease cost	—	—
Total lease cost	$2,920	$7,899

As of September 30, 2019, the weighted average remaining lease term for operating leases was 6.88 years and the weighted average discount rate used in the measurement of operating lease liabilities was 2.91%.

The following table sets forth the undiscounted cash flows of base rent related to operating leases outstanding at September 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	$	2,845
2020	10,879
2021	9,986
2022	8,904
2023	6,889
Thereafter	19,860
Total minimum lease payments	59,363
Less: amount representing interest	5,922
Present value of future minimum lease payments	$	53,441