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Leases
 9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Leases Leases
On January 1, 2019, the Company adopted ASU 2016-02, "Leases" (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee. The Company elected the modified retrospective transition option effective with the period of adoption, elected not to recast comparative periods presented when transitioning to the new leasing standard and adjustments, if required, are made at the beginning of the period through a cumulative-effect adjustment to opening retained earnings. The Company also elected practical expedients, which allowed the Company to forego a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of the new standard resulted in the Company recording a right-of-use asset and an operating lease liability of $44.9 million and $46.1 million, respectively, based on the present value of the expected remaining lease payments at January 1, 2019.
In addition, on January 1, 2019, the Company had $5.9 million of net deferred gains associated with several sale and leaseback transactions executed prior to the adoption of ASU 2016-02. In accordance with the guidance, these net deferred gains were adjusted, net of income tax, as a cumulative-effect adjustment to opening retained earnings.
All of the leases in which the Company is the lessee are classified as operating leases and are primarily comprised of real estate properties for branches and administrative offices with terms extending through 2040.
The following table represents the consolidated statements of financial condition classification of the Company’s right-of use-assets and lease liabilities at September 30, 2020 (in thousands):
ClassificationSeptember 30, 2020December 31, 2019
Lease Right-of-Use Assets:
Operating lease right-of-use assetsOther assets$41,709 $41,754 
Lease Liabilities:
Operating lease liabilitiesOther liabilities$42,654 $42,815 
The calculated amount of the right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. Generally, the Company considers the first renewal option to be reasonably certain and includes it in the calculation of the right-of use asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception based upon the term of the lease. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was applied.
At September 30, 2020, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 9.0 years and 3.25%, respectively.
The following tables represent lease costs and other lease information for the Company's operating leases. The variable lease cost primarily represents variable payments such as common area maintenance and utilities (in thousands):
Three months ended September 30, 2020Three months ended September 30, 2019
Lease Costs
Operating lease cost $2,303 $2,127 
Variable lease cost 754 727 
Total lease cost$3,057 $2,854 

Nine months ended September 30, 2020Nine months ended September 30, 2019
Lease Costs
Operating lease cost$6,565 $6,303 
Variable lease cost2,085 2,083 
Total lease cost$8,650 $8,386 

Cash paid for amounts included in the measurement of lease liabilities:Nine months ended September 30, 2020Nine months ended September 30, 2019
Operating cash flows from operating leases$6,528 6,179 
During the three and nine months ended September 30, 2020, the Company added nine new lease obligations related to the SB One acquisition. The Company recorded a $3.8 million right-of-use asset and lease liability for these lease obligations.
Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2020 were as follows (in thousands):
Operating leases
Twelve months ended:
Remainder of 2020$2,322 
20217,018 
20226,137 
20235,622 
20245,219 
Thereafter23,584 
Total future minimum lease payments49,902 
Amounts representing interest7,248 
Present value of net future minimum lease payments$42,654 
Leases Leases
On January 1, 2019, the Company adopted ASU 2016-02, "Leases" (Topic 842) and all subsequent ASUs that modified Topic 842. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee. The Company elected the modified retrospective transition option effective with the period of adoption, elected not to recast comparative periods presented when transitioning to the new leasing standard and adjustments, if required, are made at the beginning of the period through a cumulative-effect adjustment to opening retained earnings. The Company also elected practical expedients, which allowed the Company to forego a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of the new standard resulted in the Company recording a right-of-use asset and an operating lease liability of $44.9 million and $46.1 million, respectively, based on the present value of the expected remaining lease payments at January 1, 2019.
In addition, on January 1, 2019, the Company had $5.9 million of net deferred gains associated with several sale and leaseback transactions executed prior to the adoption of ASU 2016-02. In accordance with the guidance, these net deferred gains were adjusted, net of income tax, as a cumulative-effect adjustment to opening retained earnings.
All of the leases in which the Company is the lessee are classified as operating leases and are primarily comprised of real estate properties for branches and administrative offices with terms extending through 2040.
The following table represents the consolidated statements of financial condition classification of the Company’s right-of use-assets and lease liabilities at September 30, 2020 (in thousands):
ClassificationSeptember 30, 2020December 31, 2019
Lease Right-of-Use Assets:
Operating lease right-of-use assetsOther assets$41,709 $41,754 
Lease Liabilities:
Operating lease liabilitiesOther liabilities$42,654 $42,815 
The calculated amount of the right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. Generally, the Company considers the first renewal option to be reasonably certain and includes it in the calculation of the right-of use asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception based upon the term of the lease. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was applied.
At September 30, 2020, the weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases were 9.0 years and 3.25%, respectively.
The following tables represent lease costs and other lease information for the Company's operating leases. The variable lease cost primarily represents variable payments such as common area maintenance and utilities (in thousands):
Three months ended September 30, 2020Three months ended September 30, 2019
Lease Costs
Operating lease cost $2,303 $2,127 
Variable lease cost 754 727 
Total lease cost$3,057 $2,854 

Nine months ended September 30, 2020Nine months ended September 30, 2019
Lease Costs
Operating lease cost$6,565 $6,303 
Variable lease cost2,085 2,083 
Total lease cost$8,650 $8,386 

Cash paid for amounts included in the measurement of lease liabilities:Nine months ended September 30, 2020Nine months ended September 30, 2019
Operating cash flows from operating leases$6,528 6,179 
During the three and nine months ended September 30, 2020, the Company added nine new lease obligations related to the SB One acquisition. The Company recorded a $3.8 million right-of-use asset and lease liability for these lease obligations.
Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2020 were as follows (in thousands):
Operating leases
Twelve months ended:
Remainder of 2020$2,322 
20217,018 
20226,137 
20235,622 
20245,219 
Thereafter23,584 
Total future minimum lease payments49,902 
Amounts representing interest7,248 
Present value of net future minimum lease payments$42,654