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LEASES (Notes) | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
LEASES | LEASES Effective January 1, 2019, the Company adopted the new lease accounting standard, ASU 2016-02, using the modified- retrospective method. As such, for reporting periods beginning on or after January 1, 2019, leases are recognized, presented and disclosed in accordance with ASU 2016-02, while periods prior to the adoption date were not adjusted and are reported in accordance with ASC 840, Leases ("ASC 840"). Refer to Note 2 for further details. The Company enters into noncancellable lease arrangements primarily for its office buildings and branches. Certain lease arrangements contain clauses requiring increasing rental payments over the lease term, which may be linked to an index (commonly the Consumer Price Index) or contractually stipulated. Many of these lease arrangements provide the Company with the option to renew the lease arrangement after the initial lease term. These options are included in determining the lease term used to establish the right-of-use assets and lease liabilities, when it is reasonably certain the Company will exercise its renewal option. As most of the Company's leases do not have a readily determinable implicit rate, the incremental borrowing rate is primarily used to determine the discount rate for purposes of measuring the right-of-use assets and lease liabilities. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. In connection with an acquisition, the Company assumed a lease arrangement with two of its employees. The lease is for a period of five years with an expiration date of December 1, 2019 with two consecutive five-year extension periods available at the option of the Company. The lease arrangement contains certain termination clauses whereby the Company has the right to terminate the lease arrangement. The following right-of-use assets and lease liabilities have been reported within other assets and other liabilities on the consolidated statements of condition for the period indicated:
|  |  |  | September 30, 2019
(In thousands) |  | Balance Sheet Line Item |  | Operating Leases |  | Finance Leases |  | Total
Right-of-use assets |  | Other Assets |  | $ | 13,015 |  |  | $ | 1,529 |  |  | $ | 14,544 |
Lease liabilities |  | Other Liabilities |  | 13,059 |  |  | 1,692 |  |  | 14,751 |
In accordance with ASC 842, the components of lease expense for the periods indicated were as follows:
(In thousands) |  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Lease Cost: |  |  |  |
Operating lease cost(1) |  | $ | 379 |  |  | $ | 1,098 |
Finance lease cost: |  |  |  |
Amortization of right-of-use assets |  | 28 |  |  | 83 |
Interest on lease liabilities(2) |  | 17 |  |  | 51 |
Total finance lease cost |  | 45 |  |  | 134 |
Total Lease Cost |  | $ | 424 |  |  | $ | 1,232 |
(1) | Includes immaterial short-term and variable lease costs, but excludes common area maintenance costs.
(2) | Includes immaterial variable lease costs.
In accordance with ASC 840, rent expense, excluding common area maintenance expense, for the three and nine months ended September 30, 2018 was $321,000 and $993,000, respectively. Supplemental cash flow information and non-cash activity related to leases was as follows for the period indicated:
(In thousands) |  | Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases |  | $ | 1,001 |
Operating cash flows from finance leases |  | 51 |
Financing cash flows from finance leases |  | 79 |
Right-of-use assets obtained in exchange for new lease obligations: |  |
Operating leases(1) |  | $ | 13,775 |
Finance leases(1) |  | 1,612 |
(1) | Reflects right-of-use assets recorded for the period indicated, including $10.5 million of operating leases and $1.6 million of finance leases recorded upon adoption of ASU 2016-02, as of January 1, 2019.
Supplemental balance sheet information related to leases was as follows for the period indicated:
|  | September 30, 2019
Weighted average remaining lease term (years): |  |
Operating leases |  | 16.1 years |
Finance leases |  | 22.6 years |
Weighted average discount rate: |  |
Operating leases |  | 3.40 | %
Finance leases |  | 3.95 | %
The following summarizes the remaining scheduled future minimum lease payments for operating and finance leases as of September 30, 2019:
(In thousands) |  | Operating Leases |  | Finance Leases
2019 |  | $ | 358 |  |  | $ | 44 |
2020 |  | 1,366 |  |  | 174 |
2021 |  | 1,289 |  |  | 174 |
2022 |  | 1,278 |  |  | 174 |
2023 |  | 1,239 |  |  | 174 |
Thereafter |  | 11,543 |  |  | 2,095 |
Total minimum lease payments |  | 17,073 |  |  | 2,835 |
Less: amount representing interest(1) |  | 4,014 |  |  | 1,143 |
Present value of net minimum lease payments(2) |  | $ | 13,059 |  |  | $ | 1,692 |
(1) | Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate.
(2) | Reflects the liability reported within other liabilities on the consolidated statements of condition.
As of September 30, 2019, the Company had executed a building lease that had not yet commenced in accordance with ASU 2016-02, for which it anticipates will commence in January 2020 upon completion of the landlord and Company's agreed-upon build-out. The Company anticipates that the lease will qualify as a finance lease and estimates it will record an associated lease liability of $3.4 million. The following summarizes expected future minimum lease payments, in accordance with ASC 840, as of December 31, 2018:
(In thousands) |  | Operating |  | Capital
2019 |  | $ | 1,420 |  |  | $ | 179 |
2020 |  | 941 |  |  | 179 |
2021 |  | 726 |  |  | 182 |
2022 |  | 539 |  |  | 184 |
2023 |  | 434 |  |  | 184 |
Thereafter |  | 1,268 |  |  | 1,592 |
Total minimum lease payments |  | $ | 5,328 |  |  | 2,500 |
Less: amount representing interest(1) |  |  |  | 920 |
Present value of net minimum lease payments(2) |  |  |  | $ | 1,580 |
(1) | Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception.
(2) | Reflects the liability reported within long-term borrowings on the consolidated statements of condition at December 31, 2018.
LEASES | LEASES Effective January 1, 2019, the Company adopted the new lease accounting standard, ASU 2016-02, using the modified- retrospective method. As such, for reporting periods beginning on or after January 1, 2019, leases are recognized, presented and disclosed in accordance with ASU 2016-02, while periods prior to the adoption date were not adjusted and are reported in accordance with ASC 840, Leases ("ASC 840"). Refer to Note 2 for further details. The Company enters into noncancellable lease arrangements primarily for its office buildings and branches. Certain lease arrangements contain clauses requiring increasing rental payments over the lease term, which may be linked to an index (commonly the Consumer Price Index) or contractually stipulated. Many of these lease arrangements provide the Company with the option to renew the lease arrangement after the initial lease term. These options are included in determining the lease term used to establish the right-of-use assets and lease liabilities, when it is reasonably certain the Company will exercise its renewal option. As most of the Company's leases do not have a readily determinable implicit rate, the incremental borrowing rate is primarily used to determine the discount rate for purposes of measuring the right-of-use assets and lease liabilities. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. In connection with an acquisition, the Company assumed a lease arrangement with two of its employees. The lease is for a period of five years with an expiration date of December 1, 2019 with two consecutive five-year extension periods available at the option of the Company. The lease arrangement contains certain termination clauses whereby the Company has the right to terminate the lease arrangement. The following right-of-use assets and lease liabilities have been reported within other assets and other liabilities on the consolidated statements of condition for the period indicated:
|  |  |  | September 30, 2019
(In thousands) |  | Balance Sheet Line Item |  | Operating Leases |  | Finance Leases |  | Total
Right-of-use assets |  | Other Assets |  | $ | 13,015 |  |  | $ | 1,529 |  |  | $ | 14,544 |
Lease liabilities |  | Other Liabilities |  | 13,059 |  |  | 1,692 |  |  | 14,751 |
In accordance with ASC 842, the components of lease expense for the periods indicated were as follows:
(In thousands) |  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Lease Cost: |  |  |  |
Operating lease cost(1) |  | $ | 379 |  |  | $ | 1,098 |
Finance lease cost: |  |  |  |
Amortization of right-of-use assets |  | 28 |  |  | 83 |
Interest on lease liabilities(2) |  | 17 |  |  | 51 |
Total finance lease cost |  | 45 |  |  | 134 |
Total Lease Cost |  | $ | 424 |  |  | $ | 1,232 |
(1) | Includes immaterial short-term and variable lease costs, but excludes common area maintenance costs.
(2) | Includes immaterial variable lease costs.
In accordance with ASC 840, rent expense, excluding common area maintenance expense, for the three and nine months ended September 30, 2018 was $321,000 and $993,000, respectively. Supplemental cash flow information and non-cash activity related to leases was as follows for the period indicated:
(In thousands) |  | Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows from operating leases |  | $ | 1,001 |
Operating cash flows from finance leases |  | 51 |
Financing cash flows from finance leases |  | 79 |
Right-of-use assets obtained in exchange for new lease obligations: |  |
Operating leases(1) |  | $ | 13,775 |
Finance leases(1) |  | 1,612 |
(1) | Reflects right-of-use assets recorded for the period indicated, including $10.5 million of operating leases and $1.6 million of finance leases recorded upon adoption of ASU 2016-02, as of January 1, 2019.
Supplemental balance sheet information related to leases was as follows for the period indicated:
|  | September 30, 2019
Weighted average remaining lease term (years): |  |
Operating leases |  | 16.1 years |
Finance leases |  | 22.6 years |
Weighted average discount rate: |  |
Operating leases |  | 3.40 | %
Finance leases |  | 3.95 | %
The following summarizes the remaining scheduled future minimum lease payments for operating and finance leases as of September 30, 2019:
(In thousands) |  | Operating Leases |  | Finance Leases
2019 |  | $ | 358 |  |  | $ | 44 |
2020 |  | 1,366 |  |  | 174 |
2021 |  | 1,289 |  |  | 174 |
2022 |  | 1,278 |  |  | 174 |
2023 |  | 1,239 |  |  | 174 |
Thereafter |  | 11,543 |  |  | 2,095 |
Total minimum lease payments |  | 17,073 |  |  | 2,835 |
Less: amount representing interest(1) |  | 4,014 |  |  | 1,143 |
Present value of net minimum lease payments(2) |  | $ | 13,059 |  |  | $ | 1,692 |
(1) | Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate.
(2) | Reflects the liability reported within other liabilities on the consolidated statements of condition.
As of September 30, 2019, the Company had executed a building lease that had not yet commenced in accordance with ASU 2016-02, for which it anticipates will commence in January 2020 upon completion of the landlord and Company's agreed-upon build-out. The Company anticipates that the lease will qualify as a finance lease and estimates it will record an associated lease liability of $3.4 million. The following summarizes expected future minimum lease payments, in accordance with ASC 840, as of December 31, 2018:
(In thousands) |  | Operating |  | Capital
2019 |  | $ | 1,420 |  |  | $ | 179 |
2020 |  | 941 |  |  | 179 |
2021 |  | 726 |  |  | 182 |
2022 |  | 539 |  |  | 184 |
2023 |  | 434 |  |  | 184 |
Thereafter |  | 1,268 |  |  | 1,592 |
Total minimum lease payments |  | $ | 5,328 |  |  | 2,500 |
Less: amount representing interest(1) |  |  |  | 920 |
Present value of net minimum lease payments(2) |  |  |  | $ | 1,580 |
(1) | Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception.
(2) | Reflects the liability reported within long-term borrowings on the consolidated statements of condition at December 31, 2018.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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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 http://asc.fasb.org/subtopic&trid=77888251 + Details
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