Leases

6 Months Ended

Jun. 30, 2019

LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At June 30, 2019, the Company had lease liabilities totaling $20.2 million and right-of-use assets totaling $18.6 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 six months ended June 30, 2019, the weighted average remaining lease term for operating leases was 10.96 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.50%.

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 June 30, 2019			Six Months Ended June 30, 2019

Operating lease cost	$	826		$	1,646
Short-term lease cost	—			—
Variable lease cost	33			68
Sublease income	(30		)	(61		)
Net lease cost	$	829		$	1,653

Rent expense for the three and six months ended June 30, 2018, prior to the adoption of ASU 2016-02, was $737,000 and $1.5 million, respectively.



Other information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,310
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 and six months ended June 30, 2019. At June 30, 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 June 30, 2019 is as follows:



(in thousands)
Within one year	$	3,227
After one year but within two years	3,004
After two year but within three years	2,664
After three year but within four years	2,168
After four year but within five years	2,063
After 5 years	11,546
Total undiscounted cash flows	24,672
Discount on cash flows	(4,497		)
Total lease liability	$	20,175