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LEASES
 9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
LEASES LEASES
Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the condensed consolidated statements of income.

The Corporation leases certain full-service branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.

LeasesClassificationSeptember 30, 2022December 31, 2021
Assets:
Operating lease assetsOperating lease assets$28,004 $19,928 
Finance lease assets
Premises and equipment, net (1)
304 358 
Total leased assets$28,308 $20,286 
Liabilities:
Operating lease liabilitiesOperating lease liabilities$29,366 $21,159 
Finance lease liabilitiesAccrued interest payable and other liabilities405 469 
Total leased liabilities$29,771 $21,628 
(1) Finance lease assets are recorded net of accumulated amortization of $912 thousand as of September 30, 2022 and $858 thousand as of December 31, 2021.

The components of the Corporation's net lease expense for the three and nine months ended September 30, 2022 and 2021, respectively, were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Lease CostClassification2022202120222021
Operating lease costNet occupancy expense$577 $451 $1,635 $1,328 
Variable lease costNet occupancy expense14 10 44 45 
Finance lease cost:
Amortization of leased assetsNet occupancy expense18 18 54 54 
Interest on lease liabilitiesInterest expense - borrowed funds5 6 15 18 
Sublease income (1)
Net occupancy expense(23)(17)(56)(55)
Net lease cost$591 $468 $1,692 $1,390 
(1) Sublease income excludes rental income from owned properties.
The following table sets forth future minimum rental payments under noncancellable leases with initial terms in excess of one year as of September 30, 2022:
Maturity of Lease Liabilities as of September 30, 2022
Operating Leases (1)
Finance LeasesTotal
2022$546 $26 $572 
20232,115 105 2,220 
20242,044 105 2,149 
20252,037 105 2,142 
20262,008 105 2,113 
After 202635,512 035,512 
Total lease payments44,262 446 44,708 
Less: Interest14,896 41 14,937 
Present value of lease liabilities$29,366 $405 $29,771 
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $5.3 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2022 and December 31, 2021 were as follows:
Lease Term and Discount RateSeptember 30, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases22.718.8
Finance leases4.35.0
Weighted-average discount rate
Operating leases3.53 %3.42 %
Finance leases4.49 %4.49 %

Other information related to the Corporation's lease liabilities as of September 30, 2022 and 2021, respectively, was as follows:
Other InformationSeptember 30, 2022September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$888 $699 
LEASES LEASES
Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the condensed consolidated statements of income.

The Corporation leases certain full-service branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.

LeasesClassificationSeptember 30, 2022December 31, 2021
Assets:
Operating lease assetsOperating lease assets$28,004 $19,928 
Finance lease assets
Premises and equipment, net (1)
304 358 
Total leased assets$28,308 $20,286 
Liabilities:
Operating lease liabilitiesOperating lease liabilities$29,366 $21,159 
Finance lease liabilitiesAccrued interest payable and other liabilities405 469 
Total leased liabilities$29,771 $21,628 
(1) Finance lease assets are recorded net of accumulated amortization of $912 thousand as of September 30, 2022 and $858 thousand as of December 31, 2021.

The components of the Corporation's net lease expense for the three and nine months ended September 30, 2022 and 2021, respectively, were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Lease CostClassification2022202120222021
Operating lease costNet occupancy expense$577 $451 $1,635 $1,328 
Variable lease costNet occupancy expense14 10 44 45 
Finance lease cost:
Amortization of leased assetsNet occupancy expense18 18 54 54 
Interest on lease liabilitiesInterest expense - borrowed funds5 6 15 18 
Sublease income (1)
Net occupancy expense(23)(17)(56)(55)
Net lease cost$591 $468 $1,692 $1,390 
(1) Sublease income excludes rental income from owned properties.
The following table sets forth future minimum rental payments under noncancellable leases with initial terms in excess of one year as of September 30, 2022:
Maturity of Lease Liabilities as of September 30, 2022
Operating Leases (1)
Finance LeasesTotal
2022$546 $26 $572 
20232,115 105 2,220 
20242,044 105 2,149 
20252,037 105 2,142 
20262,008 105 2,113 
After 202635,512 035,512 
Total lease payments44,262 446 44,708 
Less: Interest14,896 41 14,937 
Present value of lease liabilities$29,366 $405 $29,771 
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $5.3 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2022 and December 31, 2021 were as follows:
Lease Term and Discount RateSeptember 30, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases22.718.8
Finance leases4.35.0
Weighted-average discount rate
Operating leases3.53 %3.42 %
Finance leases4.49 %4.49 %

Other information related to the Corporation's lease liabilities as of September 30, 2022 and 2021, respectively, was as follows:
Other InformationSeptember 30, 2022September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$888 $699