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Leases | 12 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
Leases | Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2050. The Company has one existing finance lease, which has a lease term through 2029. The following table represents the classification of the Company’s right-of-use (“ROU”) assets and lease liabilities on the consolidated statements of financial condition (in thousands):
|  |  |  | For the Year Ended
|  |  |  | December 31, 2021 |  | December 31, 2020
Lease ROU Assets |  | Classification |  |  |  |
Operating lease ROU assets |  | Other assets |  | $ | 17,442 |  |  | $ | 22,555 |
Finance lease ROU asset |  | Premises and equipment, net |  | 1,495 |  |  | 1,694 |
Total lease ROU assets |  |  |  | $ | 18,937 |  |  | $ | 24,249 |
Lease Liabilities |  |  |  |  |  |
Operating lease liabilities (1) |  | Other liabilities |  | $ | 17,982 |  |  | $ | 22,990 |
Finance lease liability |  | Other borrowings |  | 1,904 |  |  | 2,100 |
Total lease liabilities |  |  |  | $ | 19,886 |  |  | $ | 25,090 |
(1) Operating lease liabilities excludes liabilities for future rent and lease termination payments related to closed branches of $8.2 million and $7.4 million as of December 31, 2021 and 2020, respectively. The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, Leases (Topic 842) requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception.
|  | December 31, 2021 |  | December 31, 2020
Weighted-Average Remaining Lease Term |  |  |  |
Operating leases |  | 8.22 years |  | 7.77 years
Finance lease |  | 7.59 years |  | 8.59 years
Weighted-Average Discount Rate |  |  |  |
Operating leases |  | 2.97 | % |  | 3.01 | %
Finance lease |  | 5.63 | % |  | 5.63 | %
The following table represents lease expenses and other lease information (in thousands):
|  |  |  | For the Year Ended December 31,
|  |  |  | 2021 |  | 2020 |  | 2019
Lease Expense |  |  |  |  |  |  |  |
Operating lease expense |  |  |  | $ | 5,935 |  |  | $ | 6,438 |  |  | $ | 3,904 |
Finance lease expense: |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  |  | 199 |  |  | 174 |  |  | 274 |
Interest on lease liabilities (1) |  |  |  | 112 |  |  | 110 |  |  | 174 |
Total |  |  |  | $ | 6,246 |  |  | $ | 6,722 |  |  | $ | 4,352 |
Other Information |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  | $ | 5,263 |  |  | $ | 6,298 |  |  | $ | 3,625 |
Operating cash flows from finance leases |  |  |  | 112 |  |  | 110 |  |  | 174 |
Financing cash flows from finance leases |  |  |  | 195 |  |  | 187 |  |  | 263 |
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense. During the year ended December 31, 2021, the Company sold two branches, including owned premises and equipment, all deposits associated with the branches, and selected performing loans. The Company recognized $2.0 million of gains related to the sale, which is presented in branch consolidation expense on the Consolidated Statements of Income. The Company also consolidated 4 branches in early 2021, 9 branches in late 2021, and expects to consolidate 10 branches and 1 deposit gathering location in early 2022. These plans have resulted in a shortened estimated useful life for premises and equipment and accelerated recognition of lease expenses associated with these locations, which the effect on income totaled $13.0 million and is presented in branch consolidation expense and is excluded from the table above. Other operating expenses related to these closures totaled $1.3 million and are presented in branch consolidation expense. Future minimum payments for the finance lease and operating leases with initial or remaining terms of one year or more as of December 31, 2021 were as follows (in thousands):
|  | Finance Lease |  | Operating Leases
For the Year Ending December 31, |  |  |  |
2022 |  | $ | 307 |  |  | $ | 4,404 |
2023 |  | 307 |  |  | 3,033 |
2024 |  | 307 |  |  | 2,737 |
2025 |  | 307 |  |  | 2,307 |
2026 |  | 307 |  |  | 1,650 |
Thereafter |  | 798 |  |  | 6,681 |
Total |  | 2,333 |  |  | 20,812 |
Less: Imputed interest |  | (429) |  |  | (2,830) |
Total lease liabilities |  | $ | 1,904 |  |  | $ | 17,982 |
Leases | Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2050. The Company has one existing finance lease, which has a lease term through 2029. The following table represents the classification of the Company’s right-of-use (“ROU”) assets and lease liabilities on the consolidated statements of financial condition (in thousands):
|  |  |  | For the Year Ended
|  |  |  | December 31, 2021 |  | December 31, 2020
Lease ROU Assets |  | Classification |  |  |  |
Operating lease ROU assets |  | Other assets |  | $ | 17,442 |  |  | $ | 22,555 |
Finance lease ROU asset |  | Premises and equipment, net |  | 1,495 |  |  | 1,694 |
Total lease ROU assets |  |  |  | $ | 18,937 |  |  | $ | 24,249 |
Lease Liabilities |  |  |  |  |  |
Operating lease liabilities (1) |  | Other liabilities |  | $ | 17,982 |  |  | $ | 22,990 |
Finance lease liability |  | Other borrowings |  | 1,904 |  |  | 2,100 |
Total lease liabilities |  |  |  | $ | 19,886 |  |  | $ | 25,090 |
(1) Operating lease liabilities excludes liabilities for future rent and lease termination payments related to closed branches of $8.2 million and $7.4 million as of December 31, 2021 and 2020, respectively. The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, Leases (Topic 842) requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception.
|  | December 31, 2021 |  | December 31, 2020
Weighted-Average Remaining Lease Term |  |  |  |
Operating leases |  | 8.22 years |  | 7.77 years
Finance lease |  | 7.59 years |  | 8.59 years
Weighted-Average Discount Rate |  |  |  |
Operating leases |  | 2.97 | % |  | 3.01 | %
Finance lease |  | 5.63 | % |  | 5.63 | %
The following table represents lease expenses and other lease information (in thousands):
|  |  |  | For the Year Ended December 31,
|  |  |  | 2021 |  | 2020 |  | 2019
Lease Expense |  |  |  |  |  |  |  |
Operating lease expense |  |  |  | $ | 5,935 |  |  | $ | 6,438 |  |  | $ | 3,904 |
Finance lease expense: |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  |  | 199 |  |  | 174 |  |  | 274 |
Interest on lease liabilities (1) |  |  |  | 112 |  |  | 110 |  |  | 174 |
Total |  |  |  | $ | 6,246 |  |  | $ | 6,722 |  |  | $ | 4,352 |
Other Information |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  | $ | 5,263 |  |  | $ | 6,298 |  |  | $ | 3,625 |
Operating cash flows from finance leases |  |  |  | 112 |  |  | 110 |  |  | 174 |
Financing cash flows from finance leases |  |  |  | 195 |  |  | 187 |  |  | 263 |
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense. During the year ended December 31, 2021, the Company sold two branches, including owned premises and equipment, all deposits associated with the branches, and selected performing loans. The Company recognized $2.0 million of gains related to the sale, which is presented in branch consolidation expense on the Consolidated Statements of Income. The Company also consolidated 4 branches in early 2021, 9 branches in late 2021, and expects to consolidate 10 branches and 1 deposit gathering location in early 2022. These plans have resulted in a shortened estimated useful life for premises and equipment and accelerated recognition of lease expenses associated with these locations, which the effect on income totaled $13.0 million and is presented in branch consolidation expense and is excluded from the table above. Other operating expenses related to these closures totaled $1.3 million and are presented in branch consolidation expense. Future minimum payments for the finance lease and operating leases with initial or remaining terms of one year or more as of December 31, 2021 were as follows (in thousands):
|  | Finance Lease |  | Operating Leases
For the Year Ending December 31, |  |  |  |
2022 |  | $ | 307 |  |  | $ | 4,404 |
2023 |  | 307 |  |  | 3,033 |
2024 |  | 307 |  |  | 2,737 |
2025 |  | 307 |  |  | 2,307 |
2026 |  | 307 |  |  | 1,650 |
Thereafter |  | 798 |  |  | 6,681 |
Total |  | 2,333 |  |  | 20,812 |
Less: Imputed interest |  | (429) |  |  | (2,830) |
Total lease liabilities |  | $ | 1,904 |  |  | $ | 17,982 |

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