Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

Note 9 — Leases

As of September 30, 2023 and December 31, 2022, we had operating right-of-use (“ROU”) assets of $103.1 million and $108.0 million, respectively, and operating lease liabilities of $111.0 million and $115.6 million, respectively. We maintain operating leases on land and buildings for some of our operating centers, branch facilities and ATM locations. Most leases include one or more options to renew, with renewal terms extending up to 21 years. The exercise of renewal options is based on the sole judgment of management and what they consider to be reasonably certain given the environment today. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to us if the option is not exercised. Leases with an initial term of 12 months or less are not recorded on the balance sheet and instead are recognized in lease expense on a straight-line basis over the lease term.

	Three Months Ended				Nine Months Ended
(Dollars in thousands)	September 30,				September 30,
	2023		2022		2023		2022
Lease Cost Components:
Amortization of ROU assets – finance leases	$	117	$	117	$	350	$	350
Interest on lease liabilities – finance leases		10		12		31		37
Operating lease cost (cost resulting from lease payments)		4,296		4,550		12,814		13,419
Short-term lease cost		104		218		318		592
Variable lease cost (cost excluded from lease payments)		852		615		2,327		1,813
Total lease cost	$	5,379	$	5,512	$	15,840	$	16,211
Supplemental Cash Flow and Other Information Related to Leases:
Finance lease – operating cash flows	$	10	$	12	$	31	$	37
Finance lease – financing cash flows		111		109		331		325
Operating lease – operating cash flows (fixed payments)		4,233		4,356		12,483		12,982
Operating lease – operating cash flows (net change asset/liability)		(3,400)		(3,466)		(10,008)		(10,313)
New ROU assets – operating leases		—		—		701		12,616
New ROU assets – finance leases		—		—		—		—
Weighted – average remaining lease term (years) – finance leases						4.68		5.67
Weighted – average remaining lease term (years) – operating leases						9.47		10.13
Weighted – average discount rate - finance leases						1.7%		1.7%
Weighted – average discount rate - operating leases						3.1%		3.0%
Operating lease payments due:
2023 (excluding 9 months ended September 30, 2023)					$	4,187
2024						15,799
2025						14,450
2026						14,058
2027						13,080
Thereafter						68,542
Total undiscounted cash flows						130,116
Discount on cash flows						(19,118)
Total operating lease liabilities					$	110,998

As of September 30, 2023, the Company held a small number of finance leases assumed in connection to the CenterState merger completed in 2020. These leases are all real estate leases. Terms and conditions are similar to those real estate operating leases described above. Lease classifications from the acquired institutions were retained. As of September 30, 2023, we did not maintain any leases with related parties, and determined that the number and dollar amount of our equipment leases was immaterial. As of September 30, 2023, we had no additional operating leases that have not yet commenced.