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Leases
9 Months Ended
Sep. 30, 2021
Leases  
Leases

Note 9 — Leases

As of September 30, 2021 and December 31, 2020, we had operating right-of-use (“ROU”) assets of $110.9 million and $113.4 million, respectively, and operating lease liabilities of $116.4 million and $118.3 million, respectively. We maintain operating leases on land and buildings for our operating centers, branch facilities and ATM locations. Most leases include one or more options to renew, with renewal terms extending up to 23 years. The exercise of renewal options is based on the sole judgment of management and what they consider to be reasonably certain given the environment today. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to us if the option is not exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.

The Company also holds a small number of finance leases assumed in connection to the CSFL merger. These leases are all real estate leases. Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained.

Three Months Ended

Nine Months Ended

(Dollars in thousands)

September 30,

September 30,

 

    

2021

2020

    

2021

2020

 

 

Lease Cost Components:

Amortization of ROU assets - finance leases

$

117

$

125

$

350

$

172

Interest on lease liabilities - finance leases

14

19

43

24

Operating lease cost (cost resulting from lease payments)

4,292

4,557

12,977

9,873

Short-term lease cost

116

253

327

450

Variable lease cost (cost excluded from lease payments)

 

783

 

370

 

2,073

 

739

Total lease cost

$

5,322

$

5,324

$

15,770

$

11,258

Supplemental Cash Flow and Other Information Related to Leases:

Finance lease - operating cash flows

$

14

$

19

$

43

$

27

Finance lease - financing cash flows

107

109

320

150

Operating lease - operating cash flows (fixed payments)

4,127

4,307

12,440

8,763

Operating lease - operating cash flows (net change asset/liability)

(3,215)

(3,290)

(9,691)

(5,968)

New ROU assets - operating leases

4,196

1,475

5,494

41,211

New ROU assets - finance leases

5,374

Weighted - average remaining lease term (years) - finance leases

6.66

7.66

Weighted - average remaining lease term (years) - operating leases

 

10.96

 

11.60

Weighted - average discount rate - finance leases

1.7%

1.7%

Weighted - average discount rate - operating leases

 

 

 

3.3%

 

3.3%

 

 

 

 

Operating lease payments due:

2021 (excluding the nine months ended September 30, 2021)

$

4,081

2022

15,550

2023

14,856

2024

13,125

2025

11,597

Thereafter

82,061

Total undiscounted cash flows

141,270

Discount on cash flows

(24,909)

Total operating lease liabilities

$

116,361

As of September 30, 2021, we determined that the number and dollar amount of our equipment leases was immaterial. As of September 30, 2021, we have additional operating leases that have not yet commenced of $0.4 million. These operating leases will commence in the fourth quarter of 2021 with a lease term of 10 years.