Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

(In Thousands)

The Company enters into leases in both lessor and lessee capacities.

Lessor Arrangements

As of December 31, 2022 and 2021, the net investment in these leases was $44,049 and $24,979, comprised of $37,301 and $19,646 in lease receivables, $12,875 and $8,323 in residual balances and $6,127 and $2,990 in deferred income, respectively. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases.

For the twelve months ended December 31, 2022 and 2021, the Company generated $903 and $698 in income from these leases, respectively, which is included in interest income on loans on the Consolidated Statements of Income.

The maturities of the lessor arrangements outstanding at December 31, 2022 is presented in the table below.

2023	$	476
2024	810
2025	995
2026	1,254
2027	8,289
Thereafter	32,225
Total lease receivables	$	44,049

Lessee Arrangements

As of December 31, 2022 and 2021, right-of-use assets totaled $54,930 and $63,547 and lease liabilities totaled $57,369 and $67,067, respectively. The table below provides the components of lease cost and supplemental information for the periods presented.

	Year ended December 31,
	2022			2021
Operating lease cost (cost resulting from lease payments)	$	7,847		$	8,868
Short-term lease cost	29			93
Variable lease cost (cost excluded from lease payments)	1,056			1,195
Sublease income	(624)			(658)
Net lease cost	$	8,308		$	9,498
Operating lease - operating cash flows (fixed payments)	9,528			8,666
Operating lease - operating cash flows (liability reduction)	7,789			6,640
Weighted average lease term - operating leases (in years) (at period end)	17.96			17.25
Weighted average discount rate - operating leases (at period end)	3.02		%	3.01		%
Right-of-use assets obtained in exchange for new lease liabilities - operating leases	$	3,475		$	8,142

The maturities of the lessee arrangements outstanding at December 31, 2022 are presented in the table below.

2023	$	7,342
2024	6,320
2025	5,207
2026	4,758
2027	4,156
Thereafter	48,292
Total undiscounted cash flows	76,075
Discount on cash flows	18,706
Total operating lease liabilities	$	57,369

Rental expense was $7,623, $8,298, and $10,044 for 2022, 2021, and 2020, respectively.

For more information on lease accounting, see Note 1, “Significant Accounting Policies” and on lease financing receivables, see Note 3, “Loans.”

Leases

Leases

(In Thousands)

The Company enters into leases in both lessor and lessee capacities.

Lessor Arrangements

As of December 31, 2022 and 2021, the net investment in these leases was $44,049 and $24,979, comprised of $37,301 and $19,646 in lease receivables, $12,875 and $8,323 in residual balances and $6,127 and $2,990 in deferred income, respectively. In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment clause leases.

For the twelve months ended December 31, 2022 and 2021, the Company generated $903 and $698 in income from these leases, respectively, which is included in interest income on loans on the Consolidated Statements of Income.

The maturities of the lessor arrangements outstanding at December 31, 2022 is presented in the table below.

2023	$	476
2024	810
2025	995
2026	1,254
2027	8,289
Thereafter	32,225
Total lease receivables	$	44,049

Lessee Arrangements

As of December 31, 2022 and 2021, right-of-use assets totaled $54,930 and $63,547 and lease liabilities totaled $57,369 and $67,067, respectively. The table below provides the components of lease cost and supplemental information for the periods presented.

	Year ended December 31,
	2022			2021
Operating lease cost (cost resulting from lease payments)	$	7,847		$	8,868
Short-term lease cost	29			93
Variable lease cost (cost excluded from lease payments)	1,056			1,195
Sublease income	(624)			(658)
Net lease cost	$	8,308		$	9,498
Operating lease - operating cash flows (fixed payments)	9,528			8,666
Operating lease - operating cash flows (liability reduction)	7,789			6,640
Weighted average lease term - operating leases (in years) (at period end)	17.96			17.25
Weighted average discount rate - operating leases (at period end)	3.02		%	3.01		%
Right-of-use assets obtained in exchange for new lease liabilities - operating leases	$	3,475		$	8,142

The maturities of the lessee arrangements outstanding at December 31, 2022 are presented in the table below.

2023	$	7,342
2024	6,320
2025	5,207
2026	4,758
2027	4,156
Thereafter	48,292
Total undiscounted cash flows	76,075
Discount on cash flows	18,706
Total operating lease liabilities	$	57,369

Rental expense was $7,623, $8,298, and $10,044 for 2022, 2021, and 2020, respectively.

For more information on lease accounting, see Note 1, “Significant Accounting Policies” and on lease financing receivables, see Note 3, “Loans.”