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Leases

12 Months Ended

Dec. 31, 2021

9. 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)		2021		2020
Lease expense incurred:
Operating lease cost	$	26,540	$	32,508

	At December 31,
(Dollars in thousands)		2021		2020
Operating lease right of use assets	$	138,942	$	149,125
Operating lease liabilities		157,729		165,292

	Year Ended December 31,
(Dollars in thousands)		2021		2020
Operating cash flows from operating leases	$	(18,294)	$	(20,594)

	At December 31,
	2021		2020
Weighted average remaining operating lease term	11.6 years		12.3 years
Weighted average discount rate on operating leases	4.08	%	4.10	%

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

(Dollars in thousands)
2022	$	20,865
2023		20,238
2024		20,016
2025		17,025
2026		15,805
Thereafter		108,793
Undiscounted lease payments		202,742
Less: present value adjustment		45,013
Total operating lease liability	$	157,729

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 $7.8 million 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.