Leases

12 Months Ended

Dec. 31, 2020

We have operating leases for our corporate offices and certain equipment utilized at those properties. We are obligated under a number of noncancelable operating leases for premises and equipment that expire at various dates, through 2030, and in most instances, include options to renew or extend at market rates and terms. Such leases may provide for periodic adjustments of rentals during the term of the lease based on changes in various economic indicators.

Total recorded balances for the lease assets and liabilities are as follows:


	December 31,
(Dollars in thousands)	2020		2019
Assets:
Right-of-use assets - operating leases	$	209,932	$	197,365
Liabilities:
Lease liabilities - operating leases	259,554		218,847

The components of our lease cost and supplemental cash flow information related to leases for the year ended December 31, 2020 and 2019 were as follows:


	December 31,
(Dollars in thousands)	2020		2019
Operating lease cost	$	69,249	$	41,049
Short-term lease cost	1,404		1,823
Variable lease cost	3,692		3,477
Less: sublease income	(2,265)		(4,492)
Total lease expense, net	$	72,080	$	41,857
Supplemental cash flows information:
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases	$	50,194	$	44,976
Noncash items during the period:
Lease obligations in exchange for obtaining right-of-use assets:
Operating leases	$	75,244	$	33,167

The table below presents additional information related to the Company's leases as of December 31, 2020 and 2019:


	December 31,
	2020		2019
Weighted-average remaining term (in years) - operating leases	6.05		6.29
Weighted-average discount rate - operating leases (1)	2.38	%	2.92	%

(1)The incremental borrowing rate used to calculate the lease liability was determined based on the facts and circumstances of the economic environment and the Company’s credit standing as of the effective date of ASC 842. Additionally, the total lease term and total lease payments were also considered in determining the rate. Based on these considerations the Company identified credit terms available under its existing credit lines which represent a collateralized borrowing rate that has varying credit terms that could be matched to total lease terms and total lease payments in ultimately determining the implied borrowing rate in each lease contract.

The following table presents our undiscounted future cash payments for our operating lease liabilities as of December 31, 2020:


Years ended December 31, (Dollars in thousands)	Operating Leases
2021	$	51,547
2022	48,847
2023	48,190
2024	42,418
2025	32,080
2026 and thereafter	53,842
Total lease payments	$	276,924
Less: imputed interest	(17,370)
Total lease liabilities	$	259,554

Lease Exits

The Company periodically reviews its lease portfolio to assess whether leased office space is adequate for its operations. Due to the ongoing impacts of COVID-19 and the continuation of the work-from-home policy, we decided to exit various locations during the three months ended December 31, 2020.

The Company exited from a portion of its corporate headquarters. In relation to this exit, net occupancy expenses were $7.6 million due to the accelerated depreciation of ROU assets and leasehold improvements, as well as additional termination costs. Premises and equipment expenses included $0.6 million related to the accelerated depreciation of furniture and fixtures. Both net occupancy and premises and equipment are included in the noninterest expense section of our consolidated statements of income.

Additionally, the Company decided to exit leases for portions of various office locations and market these spaces for sublease. When a company plans to utilize an ROU asset for less than it was initially intended, ASC 842, Leases, requires an evaluation for impairment and disclosure in accordance with ASC 360-10-45-2, Impairment or Disposal of Long-Lived Assets. Using each location as a standalone asset group, we determined impairment charges are required. Impairment charges that totaled $16.8 million are included in net occupancy expense in the consolidated statements of income and represent the present value of remaining lease obligations on the cease use dates. The related leasehold improvements, furniture and fixtures for these locations were also impaired with a loss recorded to premises and equipment, of $4.4 million, which is included in the noninterest expense section of the consolidated statements of income. This impairment charge represents the historical cost of the asset less any accumulated depreciation.