Leases

3 Months Ended

Mar. 31, 2020

The Corporation has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception.

Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $964 thousand and $939 thousand, respectively, for the three months ended March 31, 2020 and 2019. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

The following table presents information regarding Corporation’s operating leases:



	Mar 31, 2020		Dec 31, 2019
Weighted average discount rate	3.68	%	3.67	%
Operating leases not yet commenced	1		1
Range of lease expiration dates	1 month - 21 years		4 months - 21 years
Range of lease renewal options	1 year - 5 years		1 year - 5 years
Weighted average remaining lease term	13.9 years		14.0 years

The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at March 31, 2020, including a reconciliation to the present value of operating lease liabilities recognized in the Corporation’s Unaudited Consolidated Balance Sheets:




(Dollars in thousands)
April 1, 2020 to December 31, 2020		$2,560
2021	3,290
2022	3,165
2023	3,097
2024	2,904
2025 and thereafter	21,818
Total operating lease payments (1)	36,834
Less interest	8,650
Present value of operating lease liabilities (2)		$28,184

(1) Includes $2.6 million related to options to extend lease terms that are reasonably certain of being exercised.

(2) Includes short-term operating lease liabilities of $2.4 million.

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



(Dollars in thousands)
Three months ended March 31, 2020	2020		2019
Lease Expense:
Operating lease expense		$951		$928
Variable lease expense	13		11
Total lease expense (1)		$964		$939
Cash Paid:
Cash paid reducing operating lease liabilities		$934		$920

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