Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases:

As of December 31, 2021, the Company was the lessee in 52 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 42 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 34 years. Leases with initial terms of less than one year are not recorded on the consolidated balance sheets. The Company also does not include equipment leases and leases in which the Company is the lessor on the consolidated balance sheets as these are insignificant.

Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.

During the year ended December 31, 2020, the Company entered into a lease for a new corporate headquarters building located in downtown Nashville. The building is currently under construction and anticipated to be completed in late 2022. Upon commencement, the Company estimates recording a ROU asset and operating lease liability of approximately $29,000 and $30,000, respectively, in connection with this lease.

Information related to the Company's leases is presented below as of December 31, 2021 and 2020:

		December 31,			December 31,
	Classification	2021			2020
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	41,686		$	49,537
Finance leases	Premises and equipment, net	1,487			1,588
Total right-of-use assets		$	43,173		$	51,125
Lease liabilities:
Operating leases	Operating lease liabilities	$	46,367		$	55,187
Finance leases	Borrowings	1,518			1,598
Total lease liabilities		$	47,885		$	56,785
Weighted average remaining lease term (in years) -    operating		12.4			12.2
Weighted average remaining lease term (in years) - finance		13.4			14.4
Weighted average discount rate - operating		2.73		%	2.65		%
Weighted average discount rate - finance		1.76		%	1.76		%

The components of total lease expense included in the consolidated statements of income were as follows:

		Year Ended
		December 31,
	Classification	2021		2020		2019
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment	$	7,636	$	6,228	$	5,057
Short-term lease cost	Occupancy and equipment	427		456		365
Variable lease cost	Occupancy and equipment	1,003		602		682
Gain on lease modifications and     terminations	Occupancy and equipment	(805)		—		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings	25		11		—
Amortization of right-of-use asset	Occupancy and equipment	101		43		—
Lease impairment	Merger costs	—		2,142		—
Total lease cost		$	8,387	$	9,482	$	6,104

During the year ended December 31, 2021, the Company recorded $805 in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous acquisitions.

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of December 31, 2021 is as follows:

	Operating		Finance
	Leases		Lease
Lease payments due:
December 31, 2022	$	7,245	$	116
December 31, 2023	5,763		118
December 31, 2024	5,019		120
December 31, 2025	4,760		121
December 31, 2026	4,635		123
Thereafter	28,461		1,102
Total undiscounted future minimum lease payments	55,883		1,700
Less: imputed interest	(9,516)		(182)
Lease liability	$	46,367	$	1,518

Leases

Leases:

As of December 31, 2021, the Company was the lessee in 52 operating leases and 1 finance lease of certain branch, mortgage and operations locations, of which 42 operating leases and 1 finance lease currently have remaining terms varying from greater than one year to 34 years. Leases with initial terms of less than one year are not recorded on the consolidated balance sheets. The Company also does not include equipment leases and leases in which the Company is the lessor on the consolidated balance sheets as these are insignificant.

Many leases include one or more options to renew, with renewal terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.

During the year ended December 31, 2020, the Company entered into a lease for a new corporate headquarters building located in downtown Nashville. The building is currently under construction and anticipated to be completed in late 2022. Upon commencement, the Company estimates recording a ROU asset and operating lease liability of approximately $29,000 and $30,000, respectively, in connection with this lease.

Information related to the Company's leases is presented below as of December 31, 2021 and 2020:

		December 31,			December 31,
	Classification	2021			2020
Right-of-use assets:
Operating leases	Operating lease right-of-use assets	$	41,686		$	49,537
Finance leases	Premises and equipment, net	1,487			1,588
Total right-of-use assets		$	43,173		$	51,125
Lease liabilities:
Operating leases	Operating lease liabilities	$	46,367		$	55,187
Finance leases	Borrowings	1,518			1,598
Total lease liabilities		$	47,885		$	56,785
Weighted average remaining lease term (in years) -    operating		12.4			12.2
Weighted average remaining lease term (in years) - finance		13.4			14.4
Weighted average discount rate - operating		2.73		%	2.65		%
Weighted average discount rate - finance		1.76		%	1.76		%

The components of total lease expense included in the consolidated statements of income were as follows:

		Year Ended
		December 31,
	Classification	2021		2020		2019
Operating lease costs:
Amortization of right-of-use asset	Occupancy and equipment	$	7,636	$	6,228	$	5,057
Short-term lease cost	Occupancy and equipment	427		456		365
Variable lease cost	Occupancy and equipment	1,003		602		682
Gain on lease modifications and     terminations	Occupancy and equipment	(805)		—		—
Finance lease costs:
Interest on lease liabilities	Interest expense on borrowings	25		11		—
Amortization of right-of-use asset	Occupancy and equipment	101		43		—
Lease impairment	Merger costs	—		2,142		—
Total lease cost		$	8,387	$	9,482	$	6,104

During the year ended December 31, 2021, the Company recorded $805 in gains on lease modifications and terminations on certain vacated locations that were consolidated as a result of previous acquisitions.

The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.

A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to the total lease liability as of December 31, 2021 is as follows:

	Operating		Finance
	Leases		Lease
Lease payments due:
December 31, 2022	$	7,245	$	116
December 31, 2023	5,763		118
December 31, 2024	5,019		120
December 31, 2025	4,760		121
December 31, 2026	4,635		123
Thereafter	28,461		1,102
Total undiscounted future minimum lease payments	55,883		1,700
Less: imputed interest	(9,516)		(182)
Lease liability	$	46,367	$	1,518