Leases

12 Months Ended

Dec. 31, 2019

(8.)

LEASES

Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”), establishes a right of use model that requires a lessee to record a right of use asset and a lease liability for all leases with terms longer than 12 months. The Company is obligated under a number of non-cancellable operating lease agreements for land, buildings and equipment with terms, including renewal options reasonably certain to be exercised, extending through 2047. One building lease is subleased for terms extending through 2021.

The following table represents the consolidated statements of financial condition classification of the Company’s right of use assets and lease liabilities as of December 31 (in thousands):

		2019			2018
	Balance Sheet Location
Operating Lease Right of Use Assets:
Gross carrying amount	Other assets	$	23,224		$	—
Accumulated amortization	Other assets		(1,861	)		—
Net book value		$	21,363		$	—

Operating Lease Liabilities:
Right of use lease obligations	Other liabilities	$	22,800		$	—

The weighted average remaining lease term for operating leases was 21.7 years at December 31, 2019 and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.80%. The Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term for the discount rate.

The following table represents lease costs and other lease information for the years ended December 31 (in thousands):

	2019			2018		2017
Lease Costs:
Operating lease costs	$	2,758		$	—	$	—
Variable lease costs ⁽¹⁾		428			—		—
Sublease income		(46	)		—		—
Net lease costs	$	3,140		$	—	$	—

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,641		$	—	$	—
Initial recognition of operating lease right of use assets	$	23,275		$	—	$	—
Initial recognition of operating lease liabilities	$	23,985		$	—	$	—
Right of use assets obtained in exchange for new operating lease liabilities	$	620		$	—	$	—

⁽¹⁾	Variable lease costs primarily represent variable payments such as common area maintenance, insurance, taxes and utilities.

Rent expense relating to operating leases, included in occupancy and equipment expense in the statements of income, was $2.9 million and $2.6 million in 2018 and 2017, respectively.

(8.)	LEASES (Continued)

Future minimum payments under non-cancellable operating leases with initial or remaining terms of one year or more are as follows at December 31, 2019 (in thousands):

Year ended December 31,
2020	$	2,523
2021		2,308
2022		1,857
2023		1,493
2024		1,182
Thereafter		25,931
Total future minimum operating lease payments		35,294
Amounts representing interest		(12,494	)
Present value of net future minimum operating lease payments	$	22,800