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LEASES
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
LEASES LEASES
Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Corporation's incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the condensed consolidated statements of income.

The Corporation leases certain full-service branch offices, land, and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.

LeasesClassificationSeptember 30, 2024December 31, 2023
Assets:
Operating lease assetsOperating lease assets$37,419 $35,699 
Finance lease assets
Premises and equipment, net (1)
161 215 
Total leased assets$37,580 $35,914 
Liabilities:
Operating lease liabilitiesOperating lease liabilities$39,683 $37,650 
Finance lease liabilitiesAccrued interest payable and other liabilities224 294 
Total leased liabilities$39,907 $37,944 
(1) Finance lease assets are recorded net of accumulated amortization of $1.1 million as of September 30, 2024 and $1.0 million as of December 31, 2023.
The components of the Corporation's net lease expense for the three and nine months ended September 30, 2024 and 2023, respectively, were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Lease CostClassification2024202320242023
Operating lease costNet occupancy expense$757 $745 $2,235 $2,224 
Variable lease costNet occupancy expense27 27 83 71 
Finance lease cost:
Amortization of leased assetsNet occupancy expense18 18 54 54 
Interest on lease liabilitiesInterest expense - borrowed funds3 4 9 12 
Sublease income (1)
Net occupancy expense(24)(20)(72)(66)
Net lease cost$781 $774 $2,309 $2,295 
(1) Sublease income excludes rental income from owned properties.

The following table sets forth future minimum rental payments under noncancellable leases with initial terms in excess of one year as of September 30, 2024:
Maturity of Lease Liabilities as of September 30, 2024
Operating Leases (1)
Finance LeasesTotal
2024$660 $26 $686 
20252,679 105 2,784 
20262,668 105 2,773 
20272,688 — 2,688 
20282,744 —2,744 
After 202853,142 —53,142 
Total lease payments64,581 236 64,817 
Less: Interest24,898 12 24,910 
Present value of lease liabilities$39,683 $224 $39,907 
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $12.3 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2024 and December 31, 2023 were as follows:
Lease Term and Discount RateSeptember 30, 2024December 31, 2023
Weighted-average remaining lease term (years)
Operating leases23.023.0
Finance leases2.33.0
Weighted-average discount rate
Operating leases4.18 %4.05 %
Finance leases4.49 %4.49 %

Other information related to the Corporation's lease liabilities as of September 30, 2024 and 2023, respectively, was as follows:
Other InformationSeptember 30, 2024September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$789 $869 
LEASES LEASES
Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent the Corporation's obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Corporation's incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the condensed consolidated statements of income.

The Corporation leases certain full-service branch offices, land, and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.

LeasesClassificationSeptember 30, 2024December 31, 2023
Assets:
Operating lease assetsOperating lease assets$37,419 $35,699 
Finance lease assets
Premises and equipment, net (1)
161 215 
Total leased assets$37,580 $35,914 
Liabilities:
Operating lease liabilitiesOperating lease liabilities$39,683 $37,650 
Finance lease liabilitiesAccrued interest payable and other liabilities224 294 
Total leased liabilities$39,907 $37,944 
(1) Finance lease assets are recorded net of accumulated amortization of $1.1 million as of September 30, 2024 and $1.0 million as of December 31, 2023.
The components of the Corporation's net lease expense for the three and nine months ended September 30, 2024 and 2023, respectively, were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Lease CostClassification2024202320242023
Operating lease costNet occupancy expense$757 $745 $2,235 $2,224 
Variable lease costNet occupancy expense27 27 83 71 
Finance lease cost:
Amortization of leased assetsNet occupancy expense18 18 54 54 
Interest on lease liabilitiesInterest expense - borrowed funds3 4 9 12 
Sublease income (1)
Net occupancy expense(24)(20)(72)(66)
Net lease cost$781 $774 $2,309 $2,295 
(1) Sublease income excludes rental income from owned properties.

The following table sets forth future minimum rental payments under noncancellable leases with initial terms in excess of one year as of September 30, 2024:
Maturity of Lease Liabilities as of September 30, 2024
Operating Leases (1)
Finance LeasesTotal
2024$660 $26 $686 
20252,679 105 2,784 
20262,668 105 2,773 
20272,688 — 2,688 
20282,744 —2,744 
After 202853,142 —53,142 
Total lease payments64,581 236 64,817 
Less: Interest24,898 12 24,910 
Present value of lease liabilities$39,683 $224 $39,907 
(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $12.3 million of legally binding minimum lease payments for leases signed, but not yet commenced.

Lease terms and discount rates related to the Corporation's lease liabilities as of September 30, 2024 and December 31, 2023 were as follows:
Lease Term and Discount RateSeptember 30, 2024December 31, 2023
Weighted-average remaining lease term (years)
Operating leases23.023.0
Finance leases2.33.0
Weighted-average discount rate
Operating leases4.18 %4.05 %
Finance leases4.49 %4.49 %

Other information related to the Corporation's lease liabilities as of September 30, 2024 and 2023, respectively, was as follows:
Other InformationSeptember 30, 2024September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$789 $869