Leases

3 Months Ended

Mar. 31, 2021

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. Operating lease right-of-use (“ROU”) assets amounted to $28.8 million and $29.5 million, respectively, as of March 31, 2021 and December 31, 2020. Operating lease liabilities totaled $31.0 million and $31.7 million, respectively, as of March 31, 2021 and December 31, 2020.

As of March 31, 2021 and December 31, 2020, there were no operating leases that had not yet commenced.

Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $1.0 million and $964 thousand, respectively, for the three months ended March 31, 2021 and 2020. 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 the Corporation’s operating leases:


	Mar 31, 2021		Dec 31, 2020
Weighted average discount rate	3.35	%	3.34	%
Range of lease expiration dates	4 months - 20 years		7 months - 20 years
Range of lease renewal options	1 year - 5 years		1 year - 5 years
Weighted average remaining lease term	13.2 years		13.4 years

The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at March 31, 2021, including a reconciliation to the present value of operating lease liabilities recognized in the Unaudited Consolidated Balance Sheets:


(Dollars in thousands)
April 1, 2021 to December 31, 2021			$2,932
2022			3,889
2023			3,828
2024			3,617
2025			2,879
2026 and thereafter			22,046
Total operating lease payments (1)			39,191
Less: interest			8,217
Present value of operating lease liabilities (2)			$30,974

(1) Includes $2.1 million related to options to extend lease terms that are reasonably certain of being exercised.

(2) Includes short-term operating lease liabilities of $2.9 million.

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


(Dollars in thousands)

Three months ended March 31,	2021	2020
Lease Expense:
Operating lease expense	$1,005	$951
Variable lease expense	15	13
Total lease expense (1)	$1,020	$964
Cash Paid:
Cash paid reducing operating lease liabilities	$989	$934

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