LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At March 31, 2019, the Company had lease liabilities totaling $20.8 million and right-of-use assets totaling $19.2 million related to these leases. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 10.86 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.49%.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:



(in thousands)	Three Months Ended March 31, 2019

Operating lease cost	$	820
Variable lease cost	35
Sublease income	(31		)
Net lease cost	$	824

Rent expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $758,000.



Other information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	660

Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three months ended March 31, 2019. At March 31, 2019, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at March 31, 2019 is as follows:



(in thousands)
Within one year	$	3,273
After one year but within two years	3,036
After two year but within three years	2,786
After three year but within four years	2,283
After four year but within five years	2,058
After 5 years	12,061
Total undiscounted cash flows	25,497
Discount on cash flows	(4,674		)
Total lease liability	$	20,823