Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

8.     Leases

The Company has 21 operating leases for branches (including headquarters) and office spaces, nine operating leases for vehicles, and one operating lease for equipment. Our leases have remaining lease terms ranging from five months to 12 years, none of which has a renewal option reasonably certain of exercise, which has been reflected in the Company’s calculation of lease term.

The Company has elected the short-term lease recognition exemption such that the Company will not recognize Right-Of-Use (“ROU”) assets or lease liabilities for leases with a term of less than 12 months from the commencement date. The Company’s operating lease expense totaled $1.9 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for each of the three month periods ended June 30, 2020 and 2019. The Company’s operating lease expense totaled $3.8 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for each of the six month periods ended June 30, 2020 and 2019.

The Company has one agreement that qualifies as a short-term lease with expense totaling approximately $34,000 for each of the three month periods ended June 30, 2020 and 2019 and approximately $68,000 for each of the six month periods ended June 30, 2020 and 2019, included in Professional services on the Consolidated Statements of Income. The Company has $0.3 million and $0.2 million in variable lease payments, which include insurance and real estate tax expenses and was recorded in Occupancy and equipment on the Consolidated Statements of Income, for the three months ended June 30, 2020 and 2019, respectively. The Company has $0.6 million and $0.4 million in variable lease payments, which include insurance and real estate tax expenses and was recorded in Occupancy and equipment on the Consolidated Statements of Income, for the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020, the weighted-average remaining lease term for our operating leases is approximately seven years and the weighted average discount rate is 3.8%. Our lease agreements do not contain any residual value guarantees.

Certain leases have escalation clauses for operating expenses and real estate taxes. The Company’s non-cancelable operating lease agreements expire through 2032.

Supplemental balance sheet information related to leases was as follows:

(Dollars in thousands)	June 30, 2020			December 31, 2019
Operating lease ROU assets	$	38,303		$	41,254
Operating lease liabilities	$	45,897		$	49,367
Weighted-average remaining lease term-operating leases		7.2 years			8.0 years
Weighted average discount rate-operating leases		3.8	%		3.8	%

The components of lease expense and cash flow information related to leases were as follows:

	For the three months ended
(Dollars in thousands)	June 30, 2020		June 30, 2019
Lease Cost
Operating lease cost	$	1,897	$	1,893
Short-term lease cost		34		34
Variable lease cost		287		244
Total lease cost	$	2,218	$	2,171
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,200	$	2,025
Right-of-use assets obtained in exchange for new operating lease liabilities	$	27	$	21

	For the six months ended
(Dollars in thousands)	June 30, 2020		June 30, 2019
Lease Cost
Operating lease cost	$	3,782	$	3,785
Short-term lease cost		68		68
Variable lease cost		552		423
Total lease cost	$	4,402	$	4,276
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,182	$	4,050
Right-of-use assets obtained in exchange for new operating lease liabilities	$	50	$	42

The Company’s minimum annual rental payments for Bank facilities due under non-cancelable leases are as follows as of June 30, 2020:

	Minimum Rental
	(In thousands)
Years ended December 31:
2020	$	3,717
2021		7,687
2022		7,272
2023		7,400
2024		7,425
Thereafter		19,148
Total minimum payments required		52,649
Less: Implied interest		6,752
Total lease obligations	$	45,897