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OPERATING LEASES | 3 Months Ended
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Mar. 31, 2023
Leases [Abstract] |
LEASES | 13. OPERATING LEASES We lease certain land and buildings for our bank branches and ATMs. In some instances, a lease may contain renewal options to extend the term of the lease. Renewal options that are likely to be exercised 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 period indicated:
| Three Months Ended March 31, |  |
(dollars in thousands) | 2023 |  | 2022 |  |  |  |
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,325 |  |  | $ | 1,390 |  |  |  |  |
Variable lease cost | 888 |  |  | 830 |  |  |  |  |
Less: Sublease income | (17) |  |  | (12) |  |  |  |  |
Total lease cost | $ | 2,196 |  |  | $ | 2,208 |  |  |  |  |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,390) |  |  | $ | (1,506) |  |  |  |  |
Weighted-average remaining lease term - operating leases | 11.22 years |  | 11.49 years |  |  |  |
Weighted-average discount rate - operating leases | 3.96 | % |  | 3.92 | % |  |  |  |
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 remainder of fiscal year 2023, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Discount on Cash Flows |  | Lease Liability
Year Ending December 31, |  |  |
2023 (remainder) |  | $ | 3,736 |  |  | $ | 994 |  |  | $ | 2,742 |
2024 |  | 4,467 |  |  | 1,210 |  |  | 3,257 |
2025 |  | 4,181 |  |  | 1,085 |  |  | 3,096 |
2026 |  | 4,118 |  |  | 965 |  |  | 3,153 |
2027 |  | 4,108 |  |  | 840 |  |  | 3,268 |
2028 |  | 3,509 |  |  | 723 |  |  | 2,786 |
Thereafter |  | 19,682 |  |  | 2,908 |  |  | 16,774 |
Total |  | $ | 43,801 |  |  | $ | 8,725 |  |  | $ | 35,076 |
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 period indicated:
| Three Months Ended March 31, |  |
(dollars in thousands) | 2023 |  | 2022 |  |  |  |
Total rental income recognized | $ | 562 |  |  | $ | 951 |  |  |  |  |
Based on the Company's leases as lessor as of March 31, 2023, estimated lease payments for the remainder of fiscal year 2023, the next five succeeding fiscal years and all years thereafter are as follows:
(dollars in thousands) |
Year Ending December 31, |
2023 (remainder) | $ | 1,008 |
2024 | 1,189 |
2025 | 1,074 |
2026 | 939 |
2027 | 882 |
2028 | 532 |
Thereafter | 1,839 |
Total | $ | 7,463 |
LEASES | 13. OPERATING LEASES We lease certain land and buildings for our bank branches and ATMs. In some instances, a lease may contain renewal options to extend the term of the lease. Renewal options that are likely to be exercised 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 period indicated:
| Three Months Ended March 31, |  |
(dollars in thousands) | 2023 |  | 2022 |  |  |  |
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,325 |  |  | $ | 1,390 |  |  |  |  |
Variable lease cost | 888 |  |  | 830 |  |  |  |  |
Less: Sublease income | (17) |  |  | (12) |  |  |  |  |
Total lease cost | $ | 2,196 |  |  | $ | 2,208 |  |  |  |  |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,390) |  |  | $ | (1,506) |  |  |  |  |
Weighted-average remaining lease term - operating leases | 11.22 years |  | 11.49 years |  |  |  |
Weighted-average discount rate - operating leases | 3.96 | % |  | 3.92 | % |  |  |  |
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 remainder of fiscal year 2023, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Discount on Cash Flows |  | Lease Liability
Year Ending December 31, |  |  |
2023 (remainder) |  | $ | 3,736 |  |  | $ | 994 |  |  | $ | 2,742 |
2024 |  | 4,467 |  |  | 1,210 |  |  | 3,257 |
2025 |  | 4,181 |  |  | 1,085 |  |  | 3,096 |
2026 |  | 4,118 |  |  | 965 |  |  | 3,153 |
2027 |  | 4,108 |  |  | 840 |  |  | 3,268 |
2028 |  | 3,509 |  |  | 723 |  |  | 2,786 |
Thereafter |  | 19,682 |  |  | 2,908 |  |  | 16,774 |
Total |  | $ | 43,801 |  |  | $ | 8,725 |  |  | $ | 35,076 |
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 period indicated:
| Three Months Ended March 31, |  |
(dollars in thousands) | 2023 |  | 2022 |  |  |  |
Total rental income recognized | $ | 562 |  |  | $ | 951 |  |  |  |  |
Based on the Company's leases as lessor as of March 31, 2023, estimated lease payments for the remainder of fiscal year 2023, the next five succeeding fiscal years and all years thereafter are as follows:
(dollars in thousands) |
Year Ending December 31, |
2023 (remainder) | $ | 1,008 |
2024 | 1,189 |
2025 | 1,074 |
2026 | 939 |
2027 | 882 |
2028 | 532 |
Thereafter | 1,839 |
Total | $ | 7,463 |

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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