LEASES

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

LEASES

8. LEASES

We adopted ASU 2016-02, Leases on January 1, 2019, which resulted in the recognition of operating leases on the balance sheet in 2019 and forward. See note 1c for more information on the adoption of the ASU. Right-of-use assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

The Company’s operating lease obligations are for branch office facilities. Our leases have remaining lease terms of 1 to 16 years. Expenses associated with leases totaled $6.9 million in 2018, $6.8 million in 2017 and $6.4 million in 2016. The components of lease expense and other lease information as of and during the three and nine-month period ended September 30, 2019 are as follows:

	For the Three-Month Period		For the Nine-Month Period
(in thousands)	Ended September 30, 2019		Ended September 30, 2019
Operating lease cost	$	1,423	$	4,349
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	$	1,438	$	4,234
Right-of-use assets obtained in exchange for new operating lease liabilities	$	427	$	1,378
Reduction to right-of-use assets resulting from reduction to lease liabilities	$	-	$	1,279

(in thousands)	September 30, 2019
Operating lease right-of-use assets	$	23,604
Operating lease liabilities	$	25,787
Weighted-average remaining lease term - operating leases		4.91	years
Weighted-average discount rate - operating leases		2.33	%

Future minimum lease payments under non-cancellable leases as of September 30, 2019 and December 31, 2018 were as follows:

(in thousands)	September 30, 2019		December 31, 2018
2019	$	1,477	$	5,911
2020		5,975		6,019
2021		5,967		5,924
2022		5,904		5,884
2023		4,386		4,459
Thereafter		3,699		3,968
Total future minimum lease payments	$	27,408	$	32,165
Less imputed interest		(1,621)		N/A
Total operating lease liability	$	25,787		N/A