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Leases
 9 Months Ended
Sep. 30, 2023
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 2038. The Company has one existing finance lease, which has a lease term through 2029.
The following table represents the classification of the Company’s ROU assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):
September 30,December 31,
20232022
Lease ROU AssetsClassification
Operating lease ROU assetsOther assets$19,610 $19,055 
Finance lease ROU assetPremises and equipment, net1,362 1,532 
Total lease ROU assets$20,972 $20,587 
Lease Liabilities
Operating lease liabilities (1)
Other liabilities$20,645 $20,053 
Finance lease liabilityOther borrowings1,748 1,934 
Total lease liabilities$22,393 $21,987 
(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $6.3 million and $7.7 million at September 30, 2023 and December 31, 2022, 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, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally 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.
September 30,December 31,
20232022
Weighted-Average Remaining Lease Term
Operating leases6.59 years6.87 years
Finance lease5.85 years6.60 years
Weighted-Average Discount Rate
Operating leases2.95 %2.86 %
Finance lease5.63 5.63 
The following table represents lease expenses and other lease information (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Lease Expense
Operating lease expense$1,153 $1,159 $3,472 $3,857 
Finance lease expense:
Amortization of ROU assets58 49 170 149 
Interest on lease liabilities (1)
25 24 77 76 
Total$1,236 $1,232 $3,719 $4,082 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,154 $955 $3,414 $3,366 
Operating cash flows from finance leases25 24 77 76 
Financing cash flows from finance leases63 52 186 154 
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income.
Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):
Finance LeaseOperating Leases
For the Year Ending December 31,
2023$88 $1,157 
2024350 4,334 
2025350 4,351 
2026350 3,784 
2027350 2,628 
Thereafter559 6,754 
Total2,047 23,008 
Less: Imputed interest(299)(2,363)
Total lease liabilities$1,748 $20,645 
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 2038. The Company has one existing finance lease, which has a lease term through 2029.
The following table represents the classification of the Company’s ROU assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):
September 30,December 31,
20232022
Lease ROU AssetsClassification
Operating lease ROU assetsOther assets$19,610 $19,055 
Finance lease ROU assetPremises and equipment, net1,362 1,532 
Total lease ROU assets$20,972 $20,587 
Lease Liabilities
Operating lease liabilities (1)
Other liabilities$20,645 $20,053 
Finance lease liabilityOther borrowings1,748 1,934 
Total lease liabilities$22,393 $21,987 
(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $6.3 million and $7.7 million at September 30, 2023 and December 31, 2022, 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, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally 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.
September 30,December 31,
20232022
Weighted-Average Remaining Lease Term
Operating leases6.59 years6.87 years
Finance lease5.85 years6.60 years
Weighted-Average Discount Rate
Operating leases2.95 %2.86 %
Finance lease5.63 5.63 
The following table represents lease expenses and other lease information (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Lease Expense
Operating lease expense$1,153 $1,159 $3,472 $3,857 
Finance lease expense:
Amortization of ROU assets58 49 170 149 
Interest on lease liabilities (1)
25 24 77 76 
Total$1,236 $1,232 $3,719 $4,082 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,154 $955 $3,414 $3,366 
Operating cash flows from finance leases25 24 77 76 
Financing cash flows from finance leases63 52 186 154 
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income.
Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):
Finance LeaseOperating Leases
For the Year Ending December 31,
2023$88 $1,157 
2024350 4,334 
2025350 4,351 
2026350 3,784 
2027350 2,628 
Thereafter559 6,754 
Total2,047 23,008 
Less: Imputed interest(299)(2,363)
Total lease liabilities$1,748 $20,645