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Leases

12 Months Ended

Dec. 31, 2020

9. LEASES

Effective January 1, 2019, the Company adopted ASU 2016-02 and ASU 2018-11 which outline new guidance on the accounting for leases. The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Most leases include an option to extend or renew the lease term. The exercise of the renewal is at the Company’s discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercise those options. The Company, in determining the present value of lease payments utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with terms of the underlying lease.

Supplemental information related to operating leases is as follows for the periods indicated:

	Year Ended December 31,
(Dollars in thousands)		2020		2019
Lease expense incurred:
Operating lease cost	$	32,508	$	24,524

	At December 31,
(Dollars in thousands)		2020		2019
Operating lease right of use assets	$	149,125	$	161,435
Operating lease liabilities		165,292		169,909

	Year Ended December 31,
(Dollars in thousands)		2020		2019
Operating cash flows from operating leases	$	(20,594)	$	(20,041)

	At December 31,
	2020		2019
Weighted average remaining operating lease term	12.3 years		12.6 years
Weighted average discount rate on operating leases	4.10	%	3.91	%

Maturities of the existing lease liabilities are expected to occur as follows:

(Dollars in thousands)
2021	$	18,536
2022		20,971
2023		20,198
2024		19,947
2025		16,956
Thereafter		124,258
Undiscounted lease payments		220,866
Less: present value adjustment		55,574
Total operating lease liability	$	165,292

On July 2, 2019, the Company entered into a lease agreement to relocate its U.S. corporate offices from Liberty Corner, New Jersey to Warren, New Jersey. The new lease, which covers approximately 315,000 square feet of office space, became effective in October, 2019 and runs through 2036. The initial base rent payment of the lease will be approximately $650 thousand per month or $7,800 thousand per year. The Company relocated the existing operations and employees of the Liberty Corner, New Jersey facility to the new corporate complex as of December, 2020.