Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Leases

The Corporation adopted the provisions of ASC 842 on January 1, 2019. Upon adoption, operating lease ROU assets totaling $28.9 million and operating lease liabilities totaling $30.9 million were recognized in our Consolidated Balance Sheets for leases that existed at the adoption date, based on the present value of lease payments over the remaining lease term.

The weighted average discount rate used to discount operating lease liabilities at December 31, 2019 was 3.67%.

As of December 31, 2019, the Corporation has one lease that has not yet commenced. At December 31, 2019, lease expiration dates ranged from 4 months to 21 years, with additional renewal options on certain leases ranging from 1 to 5 years. At December 31, 2019, the weighted average remaining lease term for the Corporation’s operating leases was 14.0 years.

Rental expense for operating leases amounted to $3.8 million for 2019, compared to $3.7 million for 2018.

The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at December 31, 2019, including a reconciliation to the present value of operating lease liabilities recognized in the Corporation’s Consolidated Balance Sheets:

(Dollars in thousands)
Years ending December 31:	2020		$3,493
	2021	3,291
	2022	3,165
	2023	3,097
	2024	2,904
	2025 and thereafter	21,818
Total operating lease payments (1)		37,768
Less interest		8,907
Present value of operating lease liabilities (2)			$28,861

(1) Includes $2.4 million related to options to extend lease terms that are reasonably certain of being exercised.

(2) Includes short-term operating lease liabilities of $2.5 million.

The following table presents the components of total lease expense and operating cash flows:

(Dollars in thousands)
Year ended December 31,	2019
Lease Expense:
Operating lease expense		$3,724
Variable lease expense	49
Total lease expense (1)		$3,773
Cash Paid:
Cash paid reducing operating lease liabilities		$3,586

(1) Included in net occupancy expenses in the Consolidated Income Statement.

The following table presents the minimum annual lease payments under the terms of these leases, exclusive of renewal provisions at December 31, 2018:

(Dollars in thousands)
Years ending December 31:	2019		$3,544
	2020	2,980
	2021	2,677
	2022	2,293
	2023	2,059
	2024 and thereafter	22,648
Total minimum lease payments			$36,201

At December 31, 2018, lease expiration dates ranged from 5 months to 22 years, with additional renewal options on certain leases ranging from 1 to 5 years.