Leases

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

7.     Leases

The Company has 28 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 four months to approximately 15 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 $2.2 million and $1.9 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for the three month periods ended June 30, 2021 and 2020, respectively. The Company’s operating lease expense totaled $4.3 million and $3.8 million and was recorded in Occupancy and equipment on the Consolidated Statements of Income for the six month periods ended June 30, 2021 and 2020, respectively.

The Company has one agreement that qualifies as a short-term lease with expense totaling approximately $60,000 and $34,000 for the three month periods ended June 30, 2021 and 2020 and approximately $90,000 and $68,000 for the six month periods ended June 30, 2021 and 2020, included in Professional services on the Consolidated Statements of Income. The Company has $0.3 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 each of the three months ended June 30, 2021 and 2020. The Company has $0.6 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 each of the six months ended June 30, 2021 and 2020. At June 30, 2021, the weighted-average remaining lease term for our operating leases is approximately eight years and the weighted average discount rate is 3.2%. 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 2036.

Supplemental balance sheet information related to leases was as follows:

(Dollars in thousands)	June 30, 2021			December 31, 2020
Operating lease ROU asset	$	51,972		$	50,743
Operating lease liability	$	56,151		$	59,100
Weighted-average remaining lease term-operating leases		7.7 years			8.3 years
Weighted average discount rate-operating leases		3.2	%		3.2	%

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, 2021		June 30, 2020
Lease Cost
Operating lease cost	$	2,244	$	1,897
Short-term lease cost		60		34
Variable lease cost		298		287
Total lease cost	$	2,602	$	2,218
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,418	$	2,200
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	27

	For the six months ended
(Dollars in thousands)	June 30, 2021		June 30, 2020
Lease Cost
Operating lease cost	$	4,348	$	3,782
Short-term lease cost		95		68
Variable lease cost		596		552
Total lease cost	$	5,039	$	4,402
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	8,048	$	4,182
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	50

The Company’s minimum annual rental payments for Bank facilities due under non-cancelable leases are as follows as of June 30, 2021:

	Minimum Rental
	(In thousands)
Years ended December 31:
2021	$	4,369
2022		9,149
2023		9,281
2024		9,121
2025		8,479
Thereafter		22,898
Total minimum payments required		63,297
Less: Implied interest		7,146
Total lease obligations	$	56,151

The Company’s minimum annual rental payments for Bank facilities due under non-cancelable leases are as follows as of December 31, 2020:

	Minimum Rental
	(In thousands)
Years ended December 31:
2021	$	8,757
2022		8,871
2023		9,006
2024		8,847
2024		8,212
Thereafter		23,547
Total minimum payments required	$	67,240
Less: Implied interest		8,140
Total lease obligations	$	59,100