Leases

6 Months Ended

Jun. 30, 2021

The Company’s leases primarily relate to real estate property for branches and office space with terms extending from three months up to 34.0 years. At June 30, 2021, all of the Company's leases are classified as operating leases, which are required to be recognized on the consolidated balance sheets as a right-of-use asset and a corresponding lease liability.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheets. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recorded at the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate, at lease inception, over a similar term in determining the present value of lease payments. Certain leases include options to renew, with one or more renewal terms ranging from five to ten years. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the right-of-use asset and lease liability.

At June 30, 2021, the Company’s operating lease right-of-use assets and operating lease liabilities included on the consolidated balance sheet were $34.6 million and $40.7 million, respectively. At December 31, 2020, the Company’s operating lease right-of-use assets and operating lease liabilities included on the consolidated balance sheet were $36.7 million and $42.7 million, respectively. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense on the consolidated statements of comprehensive income.

Supplemental lease information at or for the six months ended June 30, 2021, and June 30, 2020 is as follows (dollars in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021			2020

Operating lease cost	$	1,453	$	1,423	$	2,908		$	2,862
Variable lease cost	1,010		956		2,245			1,500

Net lease cost	$	2,463	$	2,379	$	5,153		$	4,362
Cash paid for amounts included in measurement of operating lease liabilities	$	1,691	$	1,524	$	3,399		$	3,069
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	—	$	—		$	3,028
Weighted average remaining lease term					12.24 years			12.63 years
Weighted average discount rate					3.61		%	3.59		%

The following table summarizes lease payment obligations for each of the next five years and thereafter in addition to a reconcilement to the Company's current lease liability (in thousands):


Year	Amount
2021	$	2,937
2022	5,550
2023	5,504
2024	5,067
2025	4,710
Thereafter	28,196
Total lease payments	51,964
Less: imputed interest	11,243
Present value of lease liabilities	$	40,721

As of June 30, 2021, the Company had not entered into any leases that have not yet commenced.