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Leases
 3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Leases Leases
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2038. The Company has one existing finance lease, which has a lease term through 2029.
The following table represents the classification of the Company’s Right of Use (“ROU”) assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):
March 31,December 31,
20242023
Lease ROU AssetsClassification
Operating lease ROU assetsOther assets$17,963 $18,979 
Finance lease ROU assetPremises and equipment, net1,246 1,304 
Total lease ROU assets$19,209 $20,283 
Lease Liabilities
Operating lease liabilities (1)
Other liabilities$19,060 $20,018 
Finance lease liabilityOther borrowings1,620 1,685 
Total lease liabilities$20,680 $21,703 
(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $5.7 million and $5.9 million at March 31, 2024 and December 31, 2023, respectively.
The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception.
March 31,December 31,
20242023
Weighted-Average Remaining Lease Term
Operating leases6.39 years6.52 years
Finance lease5.35 years5.60 years
Weighted-Average Discount Rate
Operating leases3.03 %3.02 %
Finance lease5.63 5.63 
The following table represents lease expenses and other lease information (in thousands):
Three Months Ended March 31,
20242023
Lease Expense
Operating lease expense$1,159 $1,145 
Finance lease expense:
Amortization of ROU assets58 58 
Interest on lease liabilities (1)
23 26 
Total$1,240 $1,229 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,101 $1,139 
Operating cash flows from finance leases23 26 
Financing cash flows from finance leases65 61 
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income.
Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):
Finance LeaseOperating Leases
For the Year Ending December 31,
2024$262 $3,274 
2025350 4,401 
2026350 3,833 
2027350 2,678 
2028350 1,524 
Thereafter209 5,545 
Total1,871 21,255 
Less: Imputed interest(251)(2,195)
Total lease liabilities$1,620 $19,060 
Leases Leases
A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company’s leases are comprised of real estate property for branches, automated teller machine locations and office space with terms extending through 2038. The Company has one existing finance lease, which has a lease term through 2029.
The following table represents the classification of the Company’s Right of Use (“ROU”) assets and lease liabilities on the Consolidated Statements of Financial Condition (in thousands):
March 31,December 31,
20242023
Lease ROU AssetsClassification
Operating lease ROU assetsOther assets$17,963 $18,979 
Finance lease ROU assetPremises and equipment, net1,246 1,304 
Total lease ROU assets$19,209 $20,283 
Lease Liabilities
Operating lease liabilities (1)
Other liabilities$19,060 $20,018 
Finance lease liabilityOther borrowings1,620 1,685 
Total lease liabilities$20,680 $21,703 
(1) Operating lease liabilities excludes liabilities for future rent and estimated lease termination payments related to closed branches of $5.7 million and $5.9 million at March 31, 2024 and December 31, 2023, respectively.
The calculated amount of the ROU assets and lease liabilities are impacted by the lease term and the discount rate used to calculate the present value of the minimum lease payments. Lease agreements often include one or more options to renew the lease at the Company’s discretion. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the ROU asset and lease liability. For the discount rate, ASC Topic 842, Leases requires the Company to use the rate implicit in the lease, provided the rate is readily determinable. As this rate is not readily determinable, the Company generally utilizes its incremental borrowing rate, at lease inception, over a similar term. For operating leases existing prior to January 1, 2019, the Company used the incremental borrowing rate for the remaining lease term as of January 1, 2019. For the finance lease, the Company utilized its incremental borrowing rate at lease inception.
March 31,December 31,
20242023
Weighted-Average Remaining Lease Term
Operating leases6.39 years6.52 years
Finance lease5.35 years5.60 years
Weighted-Average Discount Rate
Operating leases3.03 %3.02 %
Finance lease5.63 5.63 
The following table represents lease expenses and other lease information (in thousands):
Three Months Ended March 31,
20242023
Lease Expense
Operating lease expense$1,159 $1,145 
Finance lease expense:
Amortization of ROU assets58 58 
Interest on lease liabilities (1)
23 26 
Total$1,240 $1,229 
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,101 $1,139 
Operating cash flows from finance leases23 26 
Financing cash flows from finance leases65 61 
(1)Included in borrowed funds interest expense on the Consolidated Statements of Income. All other costs are included in occupancy expense on the Consolidated Statements of Income.
Future minimum payments for the finance lease and operating leases with initial or remaining terms were as follows (in thousands):
Finance LeaseOperating Leases
For the Year Ending December 31,
2024$262 $3,274 
2025350 4,401 
2026350 3,833 
2027350 2,678 
2028350 1,524 
Thereafter209 5,545 
Total1,871 21,255 
Less: Imputed interest(251)(2,195)
Total lease liabilities$1,620 $19,060