Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

15. LEASES

Effective January 1, 2019, the Company adopted ASU 2016-02 and ASU 2018-11 which outline new guidance on the accounting for leases. The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Most leases include an option to extend or renew the lease term. The exercise of the renewal is at the Company’s discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercise those options. The Company, in determining the present value of lease

payments utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with terms of the underlying lease.

Supplemental information related to operating leases is as follows for the periods indicated:

	Three Months Ended
	March 31,
(Dollars in thousands)		2020		2019
Lease expense incurred:
Operating lease cost	$	7,890	$	5,187

	At March 31,		At December 31,
(Dollars in thousands)	2020		2019
Operating lease right of use assets	$	156,626	$	161,435
Operating lease liabilities		167,072		169,909

	Three Months Ended
	March 31,
(Dollars in thousands)	2020		2019
Operating cash flows from operating leases	$	(4,919)	$	(4,431)

	At March 31,		At December 31,
	2020		2019
Weighted average remaining operating lease term	12.4 years		12.6 years
Weighted average discount rate on operating leases	3.87	%	3.91	%

Maturities of the existing lease liabilities are expected to occur as follows:

(Dollars in thousands)
Remainder of 2020	$	15,187
2021		17,836
2022		19,888
2023		19,099
2024		18,831
2025		15,822
Thereafter		113,475
Undiscounted lease payments		220,138
Less: present value adjustment		53,066
Total operating lease liability	$	167,072

On July 2, 2019, the Company entered into a lease agreement to relocate its corporate offices from Liberty Corner, New Jersey to a corporate complex in Warren, New Jersey. The new lease, which covers approximately 315,000 square feet of office space, will be effective October 1, 2019 and runs through 2036. The initial base rent payment of the lease will be approximately $650 thousand per month or $7,800 thousand per year. The Company expects to relocate the existing operations and employees of the Liberty Corner, New Jersey facility to the new corporate complex during 2021.