Leases

12 Months Ended

Dec. 31, 2019

Leases of Lessee Disclosure [Text Block]

Leases

The Corporation has operating leases for retail and corporate offices, land, and equipment. The Corporation also has a finance lease for land.

These leases have original terms of 1 year or longer with remaining maturities up to 43 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any optional periods that the Corporation is reasonably likely to extend have been included in the capitalization.

The discount rate used to capitalize the operating leases is the Corporation's FHLB borrowing rate on the date of lease commencement. When determining the rate to discount specific lease obligations, the repayment period and term are considered.

Operating and finance lease costs and cash flows resulting from these leases are presented below:


($ in Thousands)	Twelve Months Ended December 31, 2019
Operating Lease Costs	$	11,006
Finance Lease Costs	36
Operating Lease Cash Flows	11,305
Finance Lease Cash Flows	35

The lease classifications on the consolidated balance sheets were as follows:


	December 31, 2019
($ in Thousands)	Amount		Consolidated Balance Sheets Category
Operating lease right-of-use asset	$	45,381	Premises and equipment
Finance lease right-of-use asset	2,188		Other assets
Operating lease liability	49,292		Accrued expenses and other liabilities
Finance lease liability	2,209		Other long-term funding

The lease payment obligations, weighted-average remaining lease term, and weighted-average discount rate were as follows:


	December 31, 2019
($ in Thousands)	Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate
Operating leases
Equipment	$	46	0.83	2.72	%
Retail and corporate offices	48,940		6.49	3.34	%
Land	6,594		9.57	3.21	%
Total operating leases	$	55,580	6.83	3.32	%
Finance leases
Land	$	4,827	39.67	3.99	%
Total finance leases	$	4,827	39.67	3.99	%

Contractual lease payment obligations for each of the next five years and thereafter, in addition to a reconciliation to the Corporation’s lease liability, were as follows:


($ in Thousands)	Operating Leases		Finance Leases		Total Leases
Twelve Months Ending December 31, 2020	$	10,662	$	85	$	10,747
2021	10,136		85		10,221
2022	7,854		85		7,939
2023	5,625		85		5,710
2024	4,988		88		5,076
Beyond 2024	16,316		4,398		20,714
Total lease payments	$	55,580	$	4,827	$	60,407
Less: interest	6,288		2,617		8,905
Present value of lease payments	$	49,292	$	2,209	$	51,501

As of December 31, 2019, additional operating leases, primarily retail and corporate offices, that had not yet commenced at December 31, 2019 total $16 million. In addition, finance leases that had not yet commenced at December 31, 2019 total $2 million. These leases will commence between January 2020 and July 2023 with lease terms of 3 years to 6 years.

The Corporation conducts a portion of its business through certain facilities and equipment under noncancelable operating leases. The Corporation also leases a subdivision of some of its facilities and receives rental income from such lease agreements. The approximate minimum annual rental payments and rental receipts under noncancelable agreements and leases with remaining terms in excess of one year are as follows:


($ in Thousands)	Payments		Receipts
2020	$	9,876	$	3,189
2021	9,976		2,903
2022	7,822		2,127
2023	5,977		1,723
2024	5,315		1,583
Thereafter	21,393		8,081
Total	$	60,359	$	19,606

Total rental expense under leases, net of lease income, totaled $5 million in 2019, $10 million in 2018, and $6 million in 2017, respectively.

Practical Expedients

The Corporation elected several practical expedients made available by the FASB. Due to materiality, the Corporation elected not to restate comparative periods upon adoption of the new guidance. In addition, the Corporation elected the package of practical expedients whereby the Corporation did not reassess (i) whether existing contracts are, or contain, leases and (ii) lease classification for existing leases. Lastly, the Corporation elected not to separate lease and non-lease components in determining the consideration in the lease agreement.