Premises, Furniture, and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

PREMISES, FURNITURE, AND EQUIPMENT

The following table summarizes the Company's premises, furniture, and equipment by category.

Premises, Furniture, and Equipment

(Dollar amounts in thousands)



	As of December 31,
	2014			2013
Land	$	51,104		$	48,590
Premises	148,963			139,336
Furniture and equipment	85,489			81,002
Total cost	285,556			268,928
Accumulated depreciation	(156,473		)	(152,751		)
Net book value of premises, furniture, and equipment	129,083			116,177
Assets held-for-sale	2,026			4,027
Total premises, furniture, and equipment	$	131,109		$	120,204

Depreciation on premises, furniture, and equipment totaled $12.2 million in 2014, $11.0 million in 2013, and $10.9 million in 2012.

Operating Leases

As of December 31, 2014, the Company was obligated to utilize certain premises and equipment under certain non-cancelable operating leases, which expire at various dates through the year ended December 31, 2030. Many of these leases contain renewal options and certain leases provide options to purchase the leased property during or at the expiration of the lease period at specific prices. Some leases contain escalation clauses calling for rentals to be adjusted for increased real estate taxes and other operating expenses or proportionately adjusted for increases in consumer or other price indices. The following summary reflects the future minimum payments by year required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2014.

Future Minimum Operating Lease Payments

(Dollar amounts in thousands)



	Total
Year ending December 31,
2015	$	5,071
2016	4,697
2017	4,592
2018	3,873
2019	2,082
2020 and thereafter	13,031
Total minimum lease payments	$	33,346

As part of the Popular acquisition, the Company assumed certain operating leases related to various branches. On the date of acquisition, an intangible liability of $10.6 million was recorded as the cash flows of the leases exceeded the fair market value. This intangible liability will be accreted into income as a reduction to net occupancy and equipment expense using the straight line method over the initial term of each lease, which expire between 2018 to 2030. The intangible liability is included in accrued interest and other liabilities in the Consolidated Statements of Financial Condition.

The following table presents the remaining scheduled accretion of the intangible liability by year.

Scheduled Accretion of Operating Lease Intangible

(Dollar amounts in thousands)



	Total
Year ending December 31,
2015	$	1,144
2016	1,144
2017	1,144
2018	900
2019	651
2020 and thereafter	5,195
Total accretion	$	10,178

The following table presents net operating lease expense for the years ended December 31, 2014, 2013, and 2012.

Net Operating Lease Expense

(Dollar amounts in thousands)



	Years Ended December 31,
	2014		2013		2012
Lease expense charged to operations ⁽¹⁾	$	4,216	$	3,123	$	3,379
Rental income from premises leased to others ⁽²⁾	541		531		931
Net operating lease expense	$	3,675	$	2,592	$	2,448


⁽¹⁾	Includes amounts paid under short-term cancelable leases and included in net occupancy and equipment expense in the Consolidated Statements of Income. As of December 31, 2014, lease expense is net of $453,000 in accretion related to the intangible liability.


⁽²⁾	Included as a reduction to net occupancy and equipment expense in the Consolidated Statements of Income.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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