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Premises, Furniture, and Equipment
 12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Premises, Furniture, and Equipment
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,
 
 
2018
 
2017
Land
 
$
28,187

 
$
30,470

Premises
 
122,003

 
123,873

Furniture and equipment
 
127,421

 
115,013

Total cost
 
277,611

 
269,356

Accumulated depreciation
 
(148,831
)
 
(148,248
)
Net book value of premises, furniture, and equipment
 
128,780

 
121,108

Assets held-for-sale
 
3,722

 
2,208

Premises, furniture, and equipment, net
 
$
132,502

 
$
123,316


During 2016, the Bank completed a sale-leaseback transaction, whereby the Bank sold to a third-party 55 branches and concurrently entered into triple net lease agreements with certain affiliates of the third-party for each of the branches sold. The sale-leaseback transaction resulted in a pre-tax gain of $88.0 million, net of transaction related expenses, of which $5.5 million was immediately recognized in earnings. Remaining pre-tax gains were $65.5 million and $74.6 million as of December 31, 2018 and 2017, respectively and are accreted as a reduction to lease expense in net occupancy and equipment expense in the Consolidated Statement of Income on a straight-line basis over the initial terms of the lease. Upon adoption of new lease guidance on January 1, 2019, the pre-tax gain will be recognized immediately as a cumulative-effect adjustment to equity in the Consolidated Statements of Financial Condition. For additional detail regarding the new lease guidance see Note 2 "Recent Accounting Pronouncements".
As of December 31, 2018 and 2017, assets held-for-sale consisted of former branches that are no longer in operation and parcels of land previously purchased for expansion.
Depreciation on premises, furniture, and equipment totaled $15.9 million in 2018, $14.0 million in 2017, and $12.8 million in 2016.
Operating Leases
As of December 31, 2018, 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, 2033. 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, 2018.
Future Minimum Operating Lease Payments
(Dollar amounts in thousands)
 
 
Total
Year Ending December 31,
 
 
2019
 
$
15,811

2020
 
16,780

2021
 
16,976

2022
 
16,967

2023
 
17,100

2024 and thereafter
 
117,806

Total minimum lease payments
 
$
201,440



The Company assumed certain operating leases related to various branches in previous acquisitions. An intangible liability is recorded when the cash flows of a lease exceed its fair market value. This intangible liability is 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 2022 and 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,
 
 
2019
 
$
648

2020
 
648

2021
 
648

2022
 
639

2023
 
612

2024 and thereafter
 
2,745

Total accretion
 
$
5,940


The following table presents net operating lease expense for the years ended December 31, 2018, 2017, and 2016.
Net Operating Lease Expense
(Dollar amounts in thousands)
 
 
Years Ended December 31,
 
 
2018
 
2017
 
2016
Lease expense charged to operations
 
$
24,880

 
$
18,666

 
$
11,207

Accretion of operating lease intangible(1)
 
(972
)
 
(1,180
)
 
(1,171
)
Accretion of deferred gain on sale-leaseback transaction(1) 
 
(9,126
)
 
(5,872
)
 
(1,473
)
Rental income from premises leased to others(1)
 
(510
)
 
(682
)
 
(527
)
Net operating lease expense
 
$
14,272

 
$
10,932

 
$
8,036


(1) 
Included as reductions to net occupancy and equipment expense in the Consolidated Statements of Income.