Leases

12 Months Ended

Dec. 31, 2023

Note 21 – Leases

The Company accounts for its leases in accordance with ASC 842, which requires the Company to record liabilities for future lease obligations as well as assets representing the right to use the underlying leased asset. The Company’s leases primarily represent future obligations to make payments for the use of buildings or space for its operations. Liabilities to make future lease payments are recorded in accrued expenses and other liabilities, while right-of-use assets are recorded in other assets in the Company’s consolidated statements of financial condition. At December 31, 2023, all of the Company’s leases were classified as operating leases or short-term leases. Short-term leases are leases that have a term of 12 months or less at commencement.

Liabilities to make future lease payments and right-of-use assets are determined based on the total contractual base rents for each lease, which include options to extend or renew each lease, where applicable, and where the Company believes it has an economic incentive to extend or renew the lease. Future contractual base rents are discounted using the rate implicit in the lease or the Company’s estimated incremental borrowing rate if the rate implicit in the lease is not readily determinable. Liabilities to make future lease payments on operating leases are reduced by periodic contractual lease payments net of periodic interest accretion. Right-of-use assets for operating leases are amortized over the term of the associated lease by amounts that represent the difference between periodic straight-line lease expense and periodic interest accretion on the related liability to make future lease payments. The Company recognizes expense for both operating leases and short-term leases on a straight-line basis.

The Company’s lease expense is recorded in premises and occupancy expense in the consolidated statements of income. The following table presents the components of lease expense for the periods indicated:


	For the Year Ended December 31,
(Dollars in thousands)	2023		2022
Operating leases	$	18,158	$	18,541
Short-term leases	1,569		1,735
Total lease expense	$	19,727	$	20,276

The following tables present supplemental information related to operating leases as of and for years ended:


	At December 31,
(Dollars in thousands)	2023		2022
Balance Sheet:
Operating lease right-of-use assets	$	41,555	$	50,596
Operating lease liabilities	$	47,115	$	58,141


	For the Year Ended December 31,
(Dollars in thousands)	2023		2022
Cash Flows:
Operating cash outflows from operating leases	$	20,021	$	20,061

The following tables provide information related to minimum contractual lease payments and other information associated with the Company’s leases as of December 31, 2023:


(Dollars in thousands)	2024		2025		2026		2027		2028		Thereafter		Total
December 31, 2023
Operating leases	$	19,179	$	13,529	$	7,848	$	5,340	$	4,384	$	2,871	$	53,151
Short-term leases	3		—		—		—		—		—		3
Total contractual base rents (1)	$	19,182	$	13,529	$	7,848	$	5,340	$	4,384	$	2,871	$	53,154

Total liability to make lease payments													$	47,115
Difference in undiscounted and discounted future lease payments													$	6,036
Weighted average discount rate													5.84		%
Weighted average remaining lease term (years)													3.7

(1) Contractual base rents reflect options to extend and renewals, and do not include property taxes and other operating expenses due under respective lease agreements.

The Company from time to time leases portions of space it owns to other parties. Income received from these transactions is recorded on a straight-line basis over the term of the sublease. For the years ended December 31, 2023 and 2022, rental income totaled $264,000 and $362,000, respectively.