LEASES

9 Months Ended

Sep. 30, 2020

The Company leases real estate properties for its network of bank branches, financial centers and corporate offices. All of the Company’s leases are currently classified as operating. Most lease agreements include one or more options to renew, with renewal terms that can extend the original lease term from one to twenty years or more. The Company does not sublease any of its leased real estate properties.

The following table provides information regarding the Company's leases as of the dates indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Components of lease expense:
Operating lease cost (resulting from lease payments)	$	3,154	$	2,912	$	9,281	$	8,605




Supplemental cash flow information related to leases:
Operating cash flows from operating leases	$	4,158	$	2,349	$	10,160	$	6,653
ROU assets obtained in the exchange for lease liabilities due to:
New leases	$	—	$	—	$	—	$	—
Acquisitions	$	—	$	—	$	7,720	$	—

					September 30, 2020		December 31, 2019
Supplemental balance sheet information related to leases:
Operating lease ROU assets					$	67,554	$	69,320
Operating lease liabilities					$	77,506	$	76,871

Other information related to leases:
Weighted average remaining lease term of operating leases					9.6 years		10.4 years
Weighted average discount rate of operating leases					3.10%		3.28%

The Company added two locations from the acquisition of RPJ during the first quarter of 2020. The associated new ROU assets obtained in exchange for lease obligations totaled $0.3 million.

On April 1, 2020, in conjunction with the acquisition of Revere, the Company added 15 additional operating leases (at 12 locations), one of which is expected to commence operations in 2021. The associated new ROU assets of $7.4 million obtained in exchange for lease obligations of $8.7 million was recorded at the close of the acquisition. The ROU assets recorded at acquisition included $1.1 million for acquisition related unfavorable fair value marks and a tenant allowance of $0.2 million. During the three months ended June 30, 2020, subsequent to and resulting from the acquisition, the Company determined that due to market overlap and other synergies, the Company would more-likely-than-not terminate seven of the acquired leases, comprised of six branch locations and one office space location. The decision resulted in an impairment charge of $2.3 million, which was recorded to Merger and acquisition expense in the Condensed Consolidated Statements of Income during the second quarter of 2020. The Company estimated the fair value of the leases to be equal to the cash payments remaining between the impairment date and the anticipated abandonment date.

At September 30, 2020, the maturities of the Company’s operating lease liabilities were as follows:


(In thousands)	Amount
Maturity:
Remaining for 2020	$	3,280
2021	12,634
2022	11,029
2023	10,882
2024	9,064
Thereafter	44,407
Total undiscounted lease payments	91,296
Less: Present value discount	(13,790)
Lease Liability	$	77,506

The Company recognized a lease liability of $2.1 million and ROU asset of $1.4 million for one additional operating lease that has not yet commenced operations at September 30, 2020, and is expected to commence operations in 2021. This ROU asset includes approximately $0.2 million of tenant allowance for improvements to the space and $0.5 million for an acquisition

related unfavorable fair market value adjustment. The Company does not have any lease arrangements with any of its related parties as of September 30, 2020.