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LEASES | 9 Months Ended
--- | ---
Sep. 30, 2024
Leases [Abstract] |
LEASES | 8. LEASES As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business. Lessee The Company's ongoing leases have remaining lease terms of less than one year to 21 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated Statements of Financial Condition. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the unaudited Consolidated Statements of Income. The Company accounts for lease components separately from nonlease components. The Company subleases certain real estate to third parties. The components of operating lease cost were as follows:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Operating lease cost (1) |  | $ | 4,308 |  |  | $ | 3,077 |  |  | $ | 12,732 |  |  | $ | 12,593 |
Sublease income |  | (30) |  |  | (37) |  |  | (90) |  |  | (118) |
Net lease cost |  | $ | 4,278 |  |  | $ | 3,040 |  |  | $ | 12,642 |  |  | $ | 12,475 |
(1)Includes variable lease cost and short-term lease cost. Supplemental information related to operating leases was as follows:
(Dollars in thousands) |  | September 30, 2024 |  | December 31, 2023
Right-of-use assets |  | $ | 134,342 |  |  | $ | 130,601 |
Lease liabilities |  | $ | 157,309 |  |  | $ | 151,596 |
Lease term and discount rate |  |  |  |
Weighted average remaining lease term (in years) |  | 12.73 |  | 13.01
Weighted average discount rate |  | 5.26 | % |  | 5.20 | %
Maturities of operating lease liabilities were as follows:
(Dollars in thousands) |  | September 30, 2024
Remaining in 2024 |  | $ | 4,721 |
2025 |  | 18,730 |
2026 |  | 17,985 |
2027 |  | 16,584 |
2028 |  | 16,601 |
After 2028 |  | 145,256 |
Total lease payments |  | 219,877 |
Less: Interest |  | (62,568) |
Present value of lease liabilities |  | $ | 157,309 |
Supplemental cash flow information related to operating leases was as follows:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 4,999 |  |  | $ | 4,041 |  |  | $ | 14,482 |  |  | $ | 14,235 |
As of September 30, 2024, the Corporation had not entered into any material leases that have not yet commenced. Lessor Equipment Leasing The Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance®. Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the unaudited Consolidated Statements of Income. The allowance for credit losses on finance leases is included in Provision for credit losses on the unaudited Consolidated Statements of Income. The components of direct finance lease income are summarized in the table below:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Direct financing leases: |  |  |  |  |  |  |  |
Interest income on lease receivable |  | $ | 16,051 |  |  | $ | 13,682 |  |  | $ | 46,665 |  |  | $ | 39,200 |
Interest income on deferred fees and costs, net |  | (2,034) |  |  | (1,643) |  |  | (5,715) |  |  | (4,479) |
Total direct financing lease net interest income |  | $ | 14,017 |  |  | $ | 12,039 |  |  | $ | 40,950 |  |  | $ | 34,721 |
Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:
(Dollars in thousands) |  | September 30, 2024 |  | December 31, 2023
Lease receivables |  | $ | 747,886 |  |  | $ | 721,338 |
Unearned income |  | (122,591) |  |  | (114,341) |
Deferred fees and costs |  | 20,126 |  |  | 16,625 |
Net investment in direct financing leases |  | $ | 645,421 |  |  | $ | 623,622 |
LEASES | 8. LEASES As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business. Lessee The Company's ongoing leases have remaining lease terms of less than one year to 21 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated Statements of Financial Condition. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the unaudited Consolidated Statements of Income. The Company accounts for lease components separately from nonlease components. The Company subleases certain real estate to third parties. The components of operating lease cost were as follows:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Operating lease cost (1) |  | $ | 4,308 |  |  | $ | 3,077 |  |  | $ | 12,732 |  |  | $ | 12,593 |
Sublease income |  | (30) |  |  | (37) |  |  | (90) |  |  | (118) |
Net lease cost |  | $ | 4,278 |  |  | $ | 3,040 |  |  | $ | 12,642 |  |  | $ | 12,475 |
(1)Includes variable lease cost and short-term lease cost. Supplemental information related to operating leases was as follows:
(Dollars in thousands) |  | September 30, 2024 |  | December 31, 2023
Right-of-use assets |  | $ | 134,342 |  |  | $ | 130,601 |
Lease liabilities |  | $ | 157,309 |  |  | $ | 151,596 |
Lease term and discount rate |  |  |  |
Weighted average remaining lease term (in years) |  | 12.73 |  | 13.01
Weighted average discount rate |  | 5.26 | % |  | 5.20 | %
Maturities of operating lease liabilities were as follows:
(Dollars in thousands) |  | September 30, 2024
Remaining in 2024 |  | $ | 4,721 |
2025 |  | 18,730 |
2026 |  | 17,985 |
2027 |  | 16,584 |
2028 |  | 16,601 |
After 2028 |  | 145,256 |
Total lease payments |  | 219,877 |
Less: Interest |  | (62,568) |
Present value of lease liabilities |  | $ | 157,309 |
Supplemental cash flow information related to operating leases was as follows:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 4,999 |  |  | $ | 4,041 |  |  | $ | 14,482 |  |  | $ | 14,235 |
As of September 30, 2024, the Corporation had not entered into any material leases that have not yet commenced. Lessor Equipment Leasing The Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance®. Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the unaudited Consolidated Statements of Income. The allowance for credit losses on finance leases is included in Provision for credit losses on the unaudited Consolidated Statements of Income. The components of direct finance lease income are summarized in the table below:
|  | Three months ended |  | Nine months ended
(Dollars in thousands) |  | September 30, 2024 |  | September 30, 2023 |  | September 30, 2024 |  | September 30, 2023
Direct financing leases: |  |  |  |  |  |  |  |
Interest income on lease receivable |  | $ | 16,051 |  |  | $ | 13,682 |  |  | $ | 46,665 |  |  | $ | 39,200 |
Interest income on deferred fees and costs, net |  | (2,034) |  |  | (1,643) |  |  | (5,715) |  |  | (4,479) |
Total direct financing lease net interest income |  | $ | 14,017 |  |  | $ | 12,039 |  |  | $ | 40,950 |  |  | $ | 34,721 |
Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:
(Dollars in thousands) |  | September 30, 2024 |  | December 31, 2023
Lease receivables |  | $ | 747,886 |  |  | $ | 721,338 |
Unearned income |  | (122,591) |  |  | (114,341) |
Deferred fees and costs |  | 20,126 |  |  | 16,625 |
Net investment in direct financing leases |  | $ | 645,421 |  |  | $ | 623,622 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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