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,
	2015			2014
Land	$	43,442		$	51,104
Premises	152,444			148,963
Furniture and equipment	90,672			85,489
Total cost	286,558			285,556
Accumulated depreciation	(171,708		)	(156,473		)
Net book value of premises, furniture, and equipment	114,850			129,083
Assets held-for-sale	7,428			2,026
Total premises, furniture, and equipment	$	122,278		$	131,109

As of December 31, 2015, assets held-for-sale consisted of twelve closed branches and seven parcels of land previously purchased for expansion. These properties were transferred from land and premises to assets held-for-sale due to the Company's intent to sell these properties over the next twelve months as a result of its strategic branch initiatives. As a result, property valuation adjustments of $8.6 million were recognized and included as a separate component in noninterest expense on the Consolidated Statements of Income.

Depreciation on premises, furniture, and equipment totaled $13.4 million in 2015, $12.2 million in 2014, and $11.0 million in 2013.

Operating Leases

As of December 31, 2015, the Company was obligated to utilize certain premises and equipment under certain non-cancelable operating leases, which expire at various dates through the year ending 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, 2015.

Future Minimum Operating Lease Payments

(Dollar amounts in thousands)



	Total
Year ending December 31,
2016	$	5,119
2017	4,832
2018	4,115
2019	2,327
2020	1,893
2021 and thereafter	11,287
Total minimum lease payments	$	29,573

As part of the Popular acquisition completed in 2014, 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,
2016	$	1,144
2017	1,144
2018	900
2019	651
2020	613
2021 and thereafter	4,582
Total accretion	$	9,034

The following table presents net operating lease expense for the years ended December 31, 2015, 2014, and 2013.

Net Operating Lease Expense

(Dollar amounts in thousands)



	Years Ended December 31,
	2015		2014		2013
Lease expense charged to operations ⁽¹⁾	$	5,706	$	4,216	$	3,123
Rental income from premises leased to others ⁽²⁾	606		541		531
Net operating lease expense	$	5,100	$	3,675	$	2,592


⁽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, 2015 and 2014, lease expense is net of accretion related to the intangible liability of $1.1 million and $453,000, respectively.


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