XML 38 R27.htm IDEA: XBRL DOCUMENT
v3.19.2

Leases | 6 Months Ended
--- | ---
Jun. 30, 2019
Leases [Abstract] |
Leases | Leases (In Thousands) The Company adopted ASC 842 in the first quarter of 2019. The Company enters into leases in both lessor and lessee capacities. ASC 842 provided for a number of optional practical expedients, of which the Company has elected several including (i) the option not to separate the lease and non-lease components; (ii) the “package of practical expedients,” where the Company does not have to reassess (A) whether expired or existing contracts contain leases under the new definition of a lease, (B) lease classification for expired or existing leases and (C) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842; and (iii) the use of hindsight in determining the lease term, which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised but not available at the lease’s inception. The practical expedient pertaining to land easements is not applicable to the Company. Lessor Arrangements The Company provides equipment financing to its customers through sales type or direct financing lease arrangements. These leases are carried at the aggregate of lease payments receivable plus the estimated residual value of the leased property less unearned income, which is accreted into interest income over the lease’s term using methods that approximate the interest method. These arrangements generally do not contain non-lease components. Lease agreements may include renewal and purchase options. As of June 30, 2019, the net investment in these leases was $8,729, comprised of $6,971 in lease receivables, $2,332 in residual balances and $574 in deferred income. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases. For the three and six months ended June 30, 2019, the Company generated $78 and $159, respectively, in income, which is included in interest income on loans on the Consolidated Statements of Income from these leases. The maturities of the lessor arrangements outstanding at June 30, 2019 is presented in the table below.
Remainder of 2019 | $ | 245 |
2020 | 1,492 |
2021 | 1,591 |
2022 | 2,326 |
2023 | 2,299 |
Thereafter | 776 |
Total lease receivables | $ | 8,729 |
Lessee Arrangements All of the Company’s lessee arrangements are operating leases, being real estate leases for Company facilities. Under these arrangements, the Company records right-of-use assets and corresponding lease liabilities, each of which is based on the present value of the remaining lease payments and are discounted at the Company’s incremental borrowing rate. Right-of-use assets are reported in premises and equipment on the Consolidated Balance Sheet and the related lease liabilities are reported in other liabilities. All leases are recorded on the Consolidated Balance Sheet except for leases with an initial term less than 12 months for which the Company elected the short-term lease recognition exemption. Lease expense is recognized on a straight-line basis over the lease term and is recorded in occupancy and equipment expense in the Consolidated Statement of Income. Variable lease payments consist primarily of common area maintenance and taxes. The Company does not have any material sublease agreements currently in place. As of June 30, 2019, right-of-use assets totaled $73,791 and lease liabilities totaled $77,449. Lease terms may contain renewal and extension options and early termination features. Many leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Renewal options which are reasonably certain to be exercised in the future were included in the measurement of right-of-use assets and lease liabilities. The table below provides the components of lease cost and supplemental information for the periods presented.
| Three months ended June 30, 2019 | Six months ended June 30, 2019
Operating lease cost (cost resulting from lease payments) | $ | 2,490 |  | $ | 4,848 |
Short-term lease cost | 10 |  | 20 |
Variable lease cost (cost excluded from lease payments) | 458 |  | 797 |
Sublease income | (170 | ) | (296 | )
Total lease cost | $ | 2,788 |  | $ | 5,369 |
Operating lease - operating cash flows (fixed payments) | 2,364 |  | 4,680 |
Operating lease - operating cash flows (liability reduction) | 1,680 |  | 3,488 |
Weighted average lease term - operating leases (in years) | 14.74 |  | 12.42 |
Weighted average discount rate - operating leases | 3.58 | % | 3.58 | %
Right-of-use assets obtained in exchange for new lease liabilities - operating leases | $ | 21,448 |  | $ | 22,743 |
The maturities of the lessee arrangements outstanding at June 30, 2019 are presented in the table below.
Remainder of 2019 | $ | 4,901 |
2020 | 9,250 |
2021 | 8,109 |
2022 | 7,628 |
2023 | 7,339 |
Thereafter | 65,589 |
Total undiscounted cash flows | 102,816 |
Discount on cash flows | 25,367 |
Total operating lease liabilities | $ | 77,449 |
As of June 30, 2019, the Company had leases with related parties that were obtained in the Brand acquisition. The related party leases have right-of-use assets of $13,424 and lease liabilities of $15,668, with total lease cost of $492 and $984 for the three and six months ended June 30, 2019, respectively. As required, the following disclosure is provided for periods prior to the adoption of ASC 842. The following is a summary of future minimum lease payments for years following December 31, 2018:
2019 | $ | 9,389 |
2020 | 8,199 |
2021 | 6,339 |
2022 | 4,929 |
2023 | 3,711 |
Thereafter | 12,592 |
Total | $ | 45,159 |
For more information on lease accounting, see Note 1, “Summary of Significant Accounting Policies” and on lease financing receivables, see Note 4, “Non Purchased Loans.”
Leases | Leases (In Thousands) The Company adopted ASC 842 in the first quarter of 2019. The Company enters into leases in both lessor and lessee capacities. ASC 842 provided for a number of optional practical expedients, of which the Company has elected several including (i) the option not to separate the lease and non-lease components; (ii) the “package of practical expedients,” where the Company does not have to reassess (A) whether expired or existing contracts contain leases under the new definition of a lease, (B) lease classification for expired or existing leases and (C) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842; and (iii) the use of hindsight in determining the lease term, which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised but not available at the lease’s inception. The practical expedient pertaining to land easements is not applicable to the Company. Lessor Arrangements The Company provides equipment financing to its customers through sales type or direct financing lease arrangements. These leases are carried at the aggregate of lease payments receivable plus the estimated residual value of the leased property less unearned income, which is accreted into interest income over the lease’s term using methods that approximate the interest method. These arrangements generally do not contain non-lease components. Lease agreements may include renewal and purchase options. As of June 30, 2019, the net investment in these leases was $8,729, comprised of $6,971 in lease receivables, $2,332 in residual balances and $574 in deferred income. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases. For the three and six months ended June 30, 2019, the Company generated $78 and $159, respectively, in income, which is included in interest income on loans on the Consolidated Statements of Income from these leases. The maturities of the lessor arrangements outstanding at June 30, 2019 is presented in the table below.
Remainder of 2019 | $ | 245 |
2020 | 1,492 |
2021 | 1,591 |
2022 | 2,326 |
2023 | 2,299 |
Thereafter | 776 |
Total lease receivables | $ | 8,729 |
Lessee Arrangements All of the Company’s lessee arrangements are operating leases, being real estate leases for Company facilities. Under these arrangements, the Company records right-of-use assets and corresponding lease liabilities, each of which is based on the present value of the remaining lease payments and are discounted at the Company’s incremental borrowing rate. Right-of-use assets are reported in premises and equipment on the Consolidated Balance Sheet and the related lease liabilities are reported in other liabilities. All leases are recorded on the Consolidated Balance Sheet except for leases with an initial term less than 12 months for which the Company elected the short-term lease recognition exemption. Lease expense is recognized on a straight-line basis over the lease term and is recorded in occupancy and equipment expense in the Consolidated Statement of Income. Variable lease payments consist primarily of common area maintenance and taxes. The Company does not have any material sublease agreements currently in place. As of June 30, 2019, right-of-use assets totaled $73,791 and lease liabilities totaled $77,449. Lease terms may contain renewal and extension options and early termination features. Many leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Renewal options which are reasonably certain to be exercised in the future were included in the measurement of right-of-use assets and lease liabilities. The table below provides the components of lease cost and supplemental information for the periods presented.
| Three months ended June 30, 2019 | Six months ended June 30, 2019
Operating lease cost (cost resulting from lease payments) | $ | 2,490 |  | $ | 4,848 |
Short-term lease cost | 10 |  | 20 |
Variable lease cost (cost excluded from lease payments) | 458 |  | 797 |
Sublease income | (170 | ) | (296 | )
Total lease cost | $ | 2,788 |  | $ | 5,369 |
Operating lease - operating cash flows (fixed payments) | 2,364 |  | 4,680 |
Operating lease - operating cash flows (liability reduction) | 1,680 |  | 3,488 |
Weighted average lease term - operating leases (in years) | 14.74 |  | 12.42 |
Weighted average discount rate - operating leases | 3.58 | % | 3.58 | %
Right-of-use assets obtained in exchange for new lease liabilities - operating leases | $ | 21,448 |  | $ | 22,743 |
The maturities of the lessee arrangements outstanding at June 30, 2019 are presented in the table below.
Remainder of 2019 | $ | 4,901 |
2020 | 9,250 |
2021 | 8,109 |
2022 | 7,628 |
2023 | 7,339 |
Thereafter | 65,589 |
Total undiscounted cash flows | 102,816 |
Discount on cash flows | 25,367 |
Total operating lease liabilities | $ | 77,449 |
As of June 30, 2019, the Company had leases with related parties that were obtained in the Brand acquisition. The related party leases have right-of-use assets of $13,424 and lease liabilities of $15,668, with total lease cost of $492 and $984 for the three and six months ended June 30, 2019, respectively. As required, the following disclosure is provided for periods prior to the adoption of ASC 842. The following is a summary of future minimum lease payments for years following December 31, 2018:
2019 | $ | 9,389 |
2020 | 8,199 |
2021 | 6,339 |
2022 | 4,929 |
2023 | 3,711 |
Thereafter | 12,592 |
Total | $ | 45,159 |
For more information on lease accounting, see Note 1, “Summary of Significant Accounting Policies” and on lease financing receivables, see Note 4, “Non Purchased Loans.”

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
Name: | us-gaap_LeasesOfLesseeDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessor entity's leasing arrangements for operating, capital and leveraged leases. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
Name: | us-gaap_LeasesOfLessorDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration