LEASES

3 Months Ended

Mar. 31, 2021

LEASES

LEASES

NOTE 5 - LEASES

Leases in which the Company is determined to be the lessee are primarily operating leases comprised of real estate property and office space for our corporate headquarters and profit centers with terms that extend to 2032. Certain properties contain portions that are subleased with terms that ended in 2020. In accordance with ASC 842, operating leases are required to be recognized as a right-of-use asset with a corresponding lease liability.

The following table presents the classification of the right-of-use asset and corresponding liability within the Condensed Consolidated Balance Sheets. The Company elected to not include short-term leases with initial terms of twelve months or less, on the Condensed Consolidated Balance Sheets, (in thousands).

		March 31,		December 31,
		2021		2020
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	10,699	$	11,341
Lease Liabilities	Classification
Operating lease liabilities	Other liabilities	$	13,241	$	13,970

The Company’s operating lease agreements typically include an option to renew the lease at the Company’s discretion. To the extent the Company is reasonably certain it will exercise the renewal option at the inception of the lease, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. ASC 842 requires

the use of the rate implicit in the lease when it is readily determinable. As this rate is typically not readily determinable, at the inception of the lease, the Company uses its collateralized incremental borrowing rate over a similar term. The amount of the right-of-use asset and lease liability are impacted by the discount rate used to calculate the present value of the minimum lease payments over the term of the lease.

	March 31,		December 31,
	2021		2020
Weighted-Average Remaining Lease Term
Operating leases	4.59	years	4.79	years
Weighted-Average Discount Rate
Operating leases	3.03	%	3.04	%

The Company’s operating leases contain fixed and variable lease components and it has elected to account for all classes of underlying assets as a single lease component. Variable lease costs primarily represent common area maintenance and parking. The Company recognized lease costs in Occupancy and equipment expense in the accompanying Condensed Consolidated Statements of Income. The following table represents the Company’s net lease costs, (in thousands):

	Three Months Ended March 31,
	2021		2020
Lease Costs
Operating lease cost	$	752	$	801
Variable lease cost		412		461
Sublease income		—		(99)
Lease costs, net	$	1,164	$	1,163

The following table presents a maturity analysis of the Company’s operating lease liabilities on an annual basis for each of the next five years and total amounts thereafter as of March 31, 2021 (in thousands):

Year Ending December 31,	Operating Leases
2021(1)	$	2,487
2022		3,239
2023		2,937
2024		2,784
2025		1,783
Thereafter		876
Total future minimum lease payments		14,106
Less: imputed interest		(865)
Present value of net future minimum lease payments	$	13,241

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⁽¹⁾ Amount represents the remaining nine months of year.