10.

Leases

The Company determines if a contract arrangement is a lease at inception and primarily enters into operating lease contracts for its branch locations, office space and certain equipment. As part of its property lease agreements, the Company

may

include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The ROU lease asset also includes any lease payments made and lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does

not

possess any leases that have variable lease payments or residual value guarantees.

Accounting Policy Elections -

The Company has elected the package of practical expedients that permits the Company to

not

reassess our prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected all of the new standard’s available transition practical expedients, including the short-term lease recognition exemption that includes

not

recognizing ROU assets or lease liabilities for existing short-term leases, and the practical expedient to

not

separate lease and non-lease components for all of our leases.

Significant Assumptions -

The Company uses its incremental borrowing rate to determine the present value of its lease liabilities. The Company calculated a weighted average borrowing rate of

3.13%

and a weighted average remaining lease term of

5.98

years as of

March 31, 2019.

As of

March 31, 2019,

the Company recorded a ROU asset of

$38.6

million, net of accumulated amortization of

$2.1

million. Operating lease expense was

$3.4

million for the

three

months ended

March 31, 2019

and includes short-term leases that were immaterial. Operating cash flows from operating leases were

$2.1

million for the

three

months ended

March 31, 2019.

The below maturity schedule represents the undiscounted lease payments for the

-year period and thereafter as of

March 31, 2019.

	As of March 31, 2019
	Operating Leases
	(In thousands)
Remaining 2019	$	6,188
2020		8,511
2021		7,603
2022		6,417
2023		5,416
Thereafter		9,522
Total lease payments		43,657
Less amount of payment representing interest		(4,123	)
Total present value of lease payments	$	39,534