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Leases Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases of Lessee Disclosure [Text Block] | Note 10 Leases On January 1, 2019, the Company adopted ASU 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842 using the transition option provided in ASU 2018-11, which provides for the modified retrospective approach. Under this approach comparative periods were not restated and no cumulative effect adjustment to the opening balance of retained earnings was required. First Commonwealth has elected to apply certain practical expedients provided under the standard including (i) to not apply the requirements in the new standard to short-term leases (ii) to not reassess the lease classification for any expired or existing lease (iii) to account for lease and non-lease components separately (iv) to not reassess initial direct costs for any existing leases. The impact of this standard primarily relates to operating leases of certain real estate properties, primarily certain branch and ATM locations and office space. First Commonwealth has no material leasing arrangements for which it is the lessor of property or equipment. Adoption of this standard resulted in the Company recognizing an ROU asset of $38.5 million and a lease liability of $41.8 million on January 1, 2019. The following table represents the Consolidated Statements of Condition classification of the Company’s ROU assets and lease liabilities, lease costs and other lease information as of and for the nine months ended September 30, 2019 (dollars in thousands).
Balance sheet: |  |
Operating lease asset classified as premises and equipment |  | $ | 49,548 |
Operating lease liability classified as other liabilities |  | 53,737 |
Income statement: |  |
Operating lease cost classified as occupancy and equipment expense for the nine months ended September 30, 2019 |  | $ | 3,959 |
Operating lease cost classified as occupancy and equipment expense for the three months ended September 30, 2019 |  | 1,275 |
Weighted average lease term, in years |  | 15.44 |
Weighted average discount rate |  | 3.42 | %
Operating cash flows |  | $ | 3,351 |
The ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. First Commonwealth's lease agreements often include one or more options to renew at the Company's discretion. If we consider the renewal option to be reasonably certain, we include the extended term in the calculation of the ROU asset and lease liability. First Commonwealth uses incremental borrowing rates when calculating the lease liability because the rate implicit in the lease is not readily determinable. The incremental borrowing rate used by First Commonwealth is an amortizing loan rate obtained from the Federal Home Loan Bank ("FHLB") of Pittsburgh. This rate is consistent with a collateralized borrowing rate and is available for terms similar to the lease payment schedules. Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2019 were as follows (dollars in thousands):
For the twelve months ended: |  |
September 30, 2020 |  | $ | 5,223 |
September 30, 2021 |  | 5,084 |
September 30, 2022 |  | 4,989 |
September 30, 2023 |  | 4,954 |
September 30, 2024 |  | 4,824 |
Thereafter |  | 45,583 |
Total future minimum lease payments |  | 70,657 |
Less remaining imputed interest |  | 16,920 |
Present value of future minimum lease payments |  | $ | 53,737 |

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- 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
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