Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

At the inception of a contract, an entity should determine whether the contract contains a lease. Topic 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of an identified asset means that the customer has both (1) the right to obtain substantially all of the economic benefits from the use of the asset and (2) the right to direct the use of the asset.

German American has finance leases for branch offices as well as operating leases for branch offices, ATM locations and certain office equipment. The right-of-use asset is included in the 'Premises, Furniture and Equipment, Net' line of the Consolidated Balance Sheet. The lease liability is included in the 'Accrued Interest Payable and Other Liabilities' line of the Consolidated Balance Sheet.

The Company used the implicit lease rate when determining the present value of lease payments for finance leases. The present value of lease payments for operating leases was determined using the incremental borrowing rate as of the date the Company adopted this standard.

The components of lease expense were as follows:

	Three Months Ended		Three Months Ended
	September 30, 2021		September 30, 2020
Finance Lease Cost:
Amortization of Right-of -Use Assets	$	53	$	52
Interest on Lease Liabilities	86		91
Operating Lease Cost	331		446
Short-term Lease Cost	36		—
Total Lease Cost	$	506	$	589

	Nine Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2020
Finance Lease Cost:
Amortization of Right-of -Use Assets	$	157	$	157
Interest on Lease Liabilities	261		274
Operating Lease Cost	1,092		1,352
Short-term Lease Cost	43		34
Total Lease Cost	$	1,553	$	1,817

The weighted average lease term and discount rates were as follows:

	September 30, 2021		September 30, 2020
Weighted Average Remaining Lease Term:
Finance Leases	10 years		11 years
Operating Leases	7 years		8 years
Weighted Average Discount Rate:
Finance Leases	11.46	%	11.48	%
Operating Leases	3.04	%	3.18	%

Supplemental balance sheet information related to leases were as follows:

	September 30, 2021		September 30, 2020
Finance Leases
Premises, Furniture and Equipment, Net	$	2,120	$	2,330
Other Borrowings	3,096		3,265
Operating Leases
Operating Lease Right-of-Use Assets	$	6,241	$	8,579
Operating Lease Liabilities	6,344		8,675

Supplemental cash flow information related to leases were as follows:

	Nine Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2020
Cash paid for amounts in the measurement of lease liabilities:
Operating Cash Flows from Finance Leases	$	261	$	274
Operating Cash Flows from Operating Leases	2,522		1,292
Financing Cash Flows from Finance Leases	111		92

The following table presents a maturity analysis of Finance and Operating Lease Liabilities:

	September 30, 2021
	Finance Leases		Operating Leases
Year 1	$	519	$	1,161
Year 2	519		1,083
Year 3	519		987
Year 4	519		886
Year 5	519		674
Thereafter	2,564		2,390
Total Lease Payments	5,159		7,181
Less Imputed Interest	(2,063)		(837)
Total	$	3,096	$	6,344

Leases

Leases

At the inception of a contract, an entity should determine whether the contract contains a lease. Topic 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Control over the use of an identified asset means that the customer has both (1) the right to obtain substantially all of the economic benefits from the use of the asset and (2) the right to direct the use of the asset.

German American has finance leases for branch offices as well as operating leases for branch offices, ATM locations and certain office equipment. The right-of-use asset is included in the 'Premises, Furniture and Equipment, Net' line of the Consolidated Balance Sheet. The lease liability is included in the 'Accrued Interest Payable and Other Liabilities' line of the Consolidated Balance Sheet.

The Company used the implicit lease rate when determining the present value of lease payments for finance leases. The present value of lease payments for operating leases was determined using the incremental borrowing rate as of the date the Company adopted this standard.

The components of lease expense were as follows:

	Three Months Ended		Three Months Ended
	September 30, 2021		September 30, 2020
Finance Lease Cost:
Amortization of Right-of -Use Assets	$	53	$	52
Interest on Lease Liabilities	86		91
Operating Lease Cost	331		446
Short-term Lease Cost	36		—
Total Lease Cost	$	506	$	589

	Nine Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2020
Finance Lease Cost:
Amortization of Right-of -Use Assets	$	157	$	157
Interest on Lease Liabilities	261		274
Operating Lease Cost	1,092		1,352
Short-term Lease Cost	43		34
Total Lease Cost	$	1,553	$	1,817

The weighted average lease term and discount rates were as follows:

	September 30, 2021		September 30, 2020
Weighted Average Remaining Lease Term:
Finance Leases	10 years		11 years
Operating Leases	7 years		8 years
Weighted Average Discount Rate:
Finance Leases	11.46	%	11.48	%
Operating Leases	3.04	%	3.18	%

Supplemental balance sheet information related to leases were as follows:

	September 30, 2021		September 30, 2020
Finance Leases
Premises, Furniture and Equipment, Net	$	2,120	$	2,330
Other Borrowings	3,096		3,265
Operating Leases
Operating Lease Right-of-Use Assets	$	6,241	$	8,579
Operating Lease Liabilities	6,344		8,675

Supplemental cash flow information related to leases were as follows:

	Nine Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2020
Cash paid for amounts in the measurement of lease liabilities:
Operating Cash Flows from Finance Leases	$	261	$	274
Operating Cash Flows from Operating Leases	2,522		1,292
Financing Cash Flows from Finance Leases	111		92

The following table presents a maturity analysis of Finance and Operating Lease Liabilities:

	September 30, 2021
	Finance Leases		Operating Leases
Year 1	$	519	$	1,161
Year 2	519		1,083
Year 3	519		987
Year 4	519		886
Year 5	519		674
Thereafter	2,564		2,390
Total Lease Payments	5,159		7,181
Less Imputed Interest	(2,063)		(837)
Total	$	3,096	$	6,344