Leases

6 Months Ended

Jun. 30, 2022

9. LEASES

United determines if an arrangement is a lease at inception. United and certain subsidiaries have entered into various noncancelable-operating leases for branch and loan production offices as well as operating facilities. Operating leases are included in operating lease

right-of-use

(“ROU”) assets and operating lease liabilities on the Consolidated Balance Sheets. Operating leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. Presently, United does not have any finance leases.

United’s operating leases are subject to renewal options under various terms. United’s operating leases have remaining terms of 1 to 16 years, some of which include options to extend leases generally for periods of 5 years. United rents or subleases certain real estate to third parties. Our sublease portfolio generally consists of operating leases to other organizations for former branch offices.

ROU assets represent United’s right to use an underlying asset for the lease term and lease liabilities represent United’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of United’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend the lease when it is reasonably certain that United will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The components of lease expense were as follows:


	Classification	Three Months Ended June 30, 2022			Three Months Ended June 30, 2021
Operating lease cost	Net occupancy expense	$	5,251		$	5,328
Sublease income	Net occupancy expense		(40	)		(358	)

Net lease cost		$	5,211		$	4,970


	Classification	Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Operating lease cost	Net occupancy expense	$	10,380		$	10,677
Sublease income	Net occupancy expense		(207	)		(655	)

Net lease cost		$	10,173		$	10,022

Supplemental balance sheet information related to leases was as follows:


	Classification	June 30, 2022		December 31, 2021
Operating lease right-of-use assets	Operating lease right-of-use assets	$	75,143	$	81,942
Operating lease liabilities	Operating lease liabilities	$	79,787	$	86,703

Other information related to leases was as follows:


	June 30, 2022
Weighted-average remaining lease term:
Operating leases		6.73 years
Weighted-average discount rate:
Operating leases		2.13	%

Supplemental cash flow information related to leases was as follows:


	Three Months Ended
	June 30, 2022		June 30, 2021
Cash paid for amounts in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,187	$	5,581
ROU assets obtained in the exchange for lease liabilities		2,523		1,839

	Six Months Ended
	June 30, 2022		June 30, 2021
Cash paid for amounts in the measurement of lease liabilities:
Operating cash flows from operating leases	$	10,497	$	11,027
ROU assets obtained in the exchange for lease liabilities		4,123		6,282

Maturities of lease liabilities by year and in the aggregate, under operating leases with initial or remaining terms of one year or more, for years subsequent to December 31, 2021, consists of the following as of June 30, 2022:


Year	Amount
2022	$	9,831
2023		17,787
2024		12,762
2025		9,647
2026		8,349
Thereafter		27,065

Total lease payments		85,441
Less: imputed interest		(5,654	)

Total	$	79,787