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v3.23.3

Leases Leases | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Lessee, Operating Leases [Text Block] | LeasesFirst Commonwealth has elected to apply certain practical expedients provided under ASU 2016-02 "Leases" (Topic 842) 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; and (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, including 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. The following table represents the unaudited Consolidated Statements of Condition classification of the Company’s right of use ("ROU") assets and lease liabilities, lease costs and other lease information.
|  |  |  |  | September 30, 2023 | December 31, 2022
Balance sheet: |  |  |  |  |  |
Operating lease asset classified as premises and equipment |  | $ | 45,783 |  | $ | 40,747 |
Operating lease liability classified as other liabilities |  | 50,155 |  | 45,149 |
|  | For the Three Months Ended |  | For the Nine Months Ended
|  | September 30, 2023 | September 30, 2022 |  | September 30, 2023 | September 30, 2022
Income statement: |  |  |  |  |  |
Operating lease cost classified as occupancy and equipment expense |  | $ | 1,521 |  | $ | 1,259 |  |  | $ | 4,565 |  | $ | 3,727 |
Weighted average lease term, in years |  |  |  |  | 13.37 | 14.10
Weighted average discount rate |  |  |  |  | 3.51 | % | 3.28 | %
Operating cash flows |  |  |  |  | $ | 1,571 |  | $ | 1,245 |
In the above table, the increase in the ROU asset and lease liability at September 30, 2023 compared to December 31, 2022, is primarily a result of leases assumed as part of the Centric acquisition. 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, 2023 were as follows (dollars in thousands):
For the twelve months ended: |  |
September 30, 2024 |  | $ | 5,847 |
September 30, 2025 |  | 5,621 |
September 30, 2026 |  | 5,160 |
September 30, 2027 |  | 4,909 |
September 30, 2028 |  | 4,672 |
Thereafter |  | 37,922 |
Total future minimum lease payments |  | 64,131 |
Less remaining imputed interest |  | 13,976 |
Operating lease liability |  | $ | 50,155 |

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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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