OPERATING LEASES

12 Months Ended

Dec. 31, 2021

19. OPERATING LEASES

We lease certain property and equipment with lease terms expiring through 2045. In some instances, a lease may contain renewal options for periods ranging from five to 15 years. All renewal options are likely to be exercised and therefore have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases and we do not include any short-term leases in the calculation of the right-of-use assets and lease liabilities. The most significant assumption related to the Company’s application of ASC 842 was the discount rate assumption. As most of the Company’s lease agreements do not provide for an implicit interest rate, the Company uses the collateralized interest rate that the Company would have to pay to borrow over a similar term to estimate the Company’s lease liability.

Total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate is summarized below for the periods indicated:


	Year Ended December 31,
(Dollars in thousands)	2021			2020
Lease cost:
Operating lease cost	$	6,397		$	6,621
Variable lease cost	2,476			2,689
Less: sublease income	(78)			(15)
Total lease cost	$	8,795		9,295

Other information:
Operating cash flows from operating leases	$	(6,533)		$	(6,371)
Weighted-average remaining lease term - operating leases	11.91 years			13.51 years
Weighted-average discount rate - operating leases	3.93		%	3.89		%

The following is a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities for the next five succeeding fiscal years and all years thereafter:


(Dollars in thousands)
Year Ending December 31,	Undiscounted Cash Flows		Lease Liability Expense		Lease Liability Reduction
2022	$	5,925	$	1,497	$	4,428
2023	5,183		1,343		3,840
2024	4,508		1,214		3,294
2025	4,195		1,088		3,107
2026	4,133		968		3,165
Thereafter	27,375		4,478		22,897
Total	$	51,319	$	10,588	$	40,731

In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following represents lease income related to these leases that was recognized for the periods indicated:


	Year Ended December 31,
(Dollars in thousands)	2021		2020
Total rental income recognized	$	2,094	2,071

Based on the Company's leases as lessor as of December 31, 2021, estimated lease payments for the next five succeeding fiscal years and all years thereafter are as follows:


(Dollars in thousands)
Year Ending December 31,
2022	$	2,105
2023	932
2024	432
2025	305
2026	152
Thereafter	434
Total	$	4,360