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Leases

3 Months Ended

Mar. 31, 2023

Note 9 — Leases

As of March 31, 2023 and December 31, 2022, we had operating right-of-use (“ROU”) assets of $104.7 million and $108.0 million, respectively, and operating lease liabilities of $112.4 million and $115.6 million, respectively. We maintain operating leases on land and buildings for some of our operating centers, branch facilities and ATM locations. Most leases include one or more options to renew, with renewal terms extending up to 21 years. The exercise of renewal options is based on the sole judgment of management and what they consider to be reasonably certain given the environment today. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to us if the option is not exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.


	Three Months Ended
(Dollars in thousands)	March 31,
	2023		2022
Lease Cost Components:
Amortization of ROU assets - finance leases	$	117	$	117
Interest on lease liabilities - finance leases		11		13
Operating lease cost (cost resulting from lease payments)		4,240		4,333
Short-term lease cost		109		143
Variable lease cost (cost excluded from lease payments)		634		437
Total lease cost	$	5,111	$	5,043
Supplemental Cash Flow and Other Information Related to Leases:
Finance lease - operating cash flows	$	11	$	13
Finance lease - financing cash flows		110		108
Operating lease - operating cash flows (fixed payments)		4,097		4,181
Operating lease - operating cash flows (net change asset/liability)		(3,287)		(3,303)
New ROU assets - operating leases		—		12,428
New ROU assets - finance leases		—		—
Weighted - average remaining lease term (years) - finance leases		5.18		6.17
Weighted - average remaining lease term (years) - operating leases		9.88		10.47
Weighted - average discount rate - finance leases		1.7%		1.7%
Weighted - average discount rate - operating leases		3.0%		3.0%

Operating lease payments due:
2023 (excluding the quarter ended March 31, 2023)	$	12,226
2024		15,011
2025		13,548
2026		13,135
2027		12,172
Thereafter		66,550
Total undiscounted cash flows		132,642
Discount on cash flows		(20,233)
Total operating lease liabilities	$	112,409

As of March 31, 2023, the Company held a small number of finance leases assumed in connection to the CenterState merger completed in 2020. These leases are all real estate leases. Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained. At March 31, 2023, we did not maintain any leases with related parties, and determined that the number and dollar amount of our equipment leases was immaterial. As of March 31, 2023, we had no additional operating leases that have not yet commenced.