Leases Leases

12 Months Ended

Dec. 31, 2021

The Company's noncancelable operating lease agreements relate to certain banking offices, back-office operational facilities, office equipment and sublease agreements. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule. As of December 31, 2021 and December 31, 2020, the Company’s operating lease ROU asset was $27.6 million and $18.0 million, respectively, and the related operating lease ROU liability was $28.8 million and $19.3 million, respectively. The Company does not have any leases designated as finance leases.

On December 30, 2021, the Company sold its Olympia, Washington headquarters campus for total proceeds of $5.4 million resulting in a net gain of $2.7 million. Contemporaneously with the closing of the sale, the Company entered into two leases pursuant to which the Company leased back the first and second floors of the main building for an initial annual rent of $227,000, subject to annual escalations of 3% over the lease terms. The leases are being accounted for as operating leases and have initial lease terms of ten and five years for the first and second floor, respectively, and both leases additionally provide the Company with two five-year options to extend. The new operating leases were incorporated into the required disclosures below.

The table below summarizes the information about our leases during the periods or at period end presented:


	Year Ended December 31,
	2021		2020
	(In thousands)
Operating lease cost	$	4,758	$	4,717
Short-term lease cost	49		49
Variable lease cost	947		967


Sublease income	(24)			(55)
Total net lease cost during the period	$	5,730		$	5,678

Operating cash used for amounts included in the measurement of lease liabilities during the period	$	5,004		$	4,881
ROU assets obtained in exchange for lease liabilities during the period	13,966			1,265

Weighted average remaining lease term of operating leases, in years, at period end	7.1			7.2
Weighted average discount rate of operating leases, at period end	2.32		%	3.12		%

The following table presents the lease payment obligations as of December 31, 2021 as outlined in the Company’s lease agreements for each of the next five years and thereafter, in thousands:




2022	$	4,750
2023	4,844
2024	4,614
2025	4,480
2026	3,930
Thereafter	8,703
Total lease payments	31,321
Implied interest	(2,480)
ROU liability	$	28,841