Premises and equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Premises and equipment

6. Premises and equipment

The detail of premises and equipment was as follows:

	December 31
	2022		2021
	(In thousands)
Land	$	148,905	$	93,862
Buildings		653,983		512,988
Leasehold improvements		386,303		304,825
Furniture and equipment — owned		1,004,127		880,153
Furniture and equipment — capital leases		115		115
		2,193,433		1,791,943
Less: accumulated depreciation and amortization
Owned assets		1,155,811		1,026,842
Capital leases		76		38
		1,155,887		1,026,880
Right of use assets — operating leases		616,082		379,702
Premises and equipment, net	$	1,653,628	$	1,144,765

The right-of-use assets and lease liabilities relate to banking offices and other space occupied by the Company and use of certain equipment under noncancelable operating lease agreements. As of December 31, 2022 and 2021, the Company recognized $709 million and $431 million respectively, of operating lease liabilities as a component of “accrued interest and other liabilities” in the consolidated balance sheet. In calculating the present value of lease payments, the Company utilized its incremental secured borrowing rate based on lease term.

The Company’s noncancelable operating lease agreements expire at various dates over the next 19 years. Real estate leases generally consist of fixed monthly rental payments with certain leases containing escalation clauses. Any variable lease payments or payments for nonlease components are recognized in the consolidated statement of income as a component of “equipment and net occupancy” expense based on actual costs incurred. Some leases contain lessee options to extend the term. Those options are included in the lease term when it is determined that it is reasonably certain the option will be exercised.

The Company has noncancelable operating lease agreements for certain equipment related to ATMs, servers, printers and mail machines that are used in the normal course of operations. The ATM leases are either based on the rights to a specific square footage or a license agreement whereby the Company has the right to operate an ATM in a landlord's location. The lease terms generally contain both fixed payments and variable payments that are transaction-based. Given the transaction-based nature of the variable payments, such payments are excluded from the measurement of the right-of-use asset and lease liability and are recognized in the consolidated statement of income as a component of “equipment and net occupancy” expense when incurred.

The following table presents information about the Company’s lease costs for operating leases recorded in the consolidated balance sheet, cash paid toward lease liabilities, and the weighted-average remaining term and discount rates of the operating leases.

	Year Ended December 31,
	2022			2021			2020
Lease cost
Operating lease cost	$	138,836		$	101,353		$	104,158
Short-term lease cost		8,269			111			198
Variable lease cost		3,743			4,103			1,565
Total lease cost	$	150,848		$	105,567		$	105,921
Other information
Right-of-use assets:
Obtained in exchange for       new operating lease liabilities	$	137,998		$	57,760		$	70,754
Acquired in business combination		226,037			—			—
Cash paid toward lease liabilities		143,029			106,586			104,396
Weighted-average remaining lease term	7 years			6 years			7 years
Weighted-average discount rate		2.97	%		2.51	%		2.74	%

Minimum lease payments under noncancelable operating leases are summarized in the following table.

	(In thousands)
Year ending December 31:
2023	$	149,061
2024		139,820
2025		118,110
2026		97,979
2027		75,220
Later years		212,036
Total lease payments		792,226
Less: imputed interest		83,025
Total	$	709,201

All other operating leasing activities were not material to the Company’s consolidated results of operations. Minimum lease payments required under capital leases are not material.