Leases

9 Months Ended

Sep. 30, 2020

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

These operating leases have original terms of 1 year or longer with remaining maturities up to 42 years, some of which include options to extend the lease term. An analysis of the lease options has been completed and any purchase options or 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:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in Thousands)	2020		2019		2020		2019
Operating Lease Costs(a)	$	3,970	$	2,708	$	9,224	$	8,502
Finance Lease Costs	39		—		115		—
Operating Lease Cash Flows	2,871		2,968		8,303		8,538
Finance Lease Cash Flows	40		—		82		—

(a) During the three and nine months ended September 30, 2020, the Corporation recognized approximately $1.5 million of operating lease costs associated with breaking leases on consolidating branches.

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


($ in Thousands)	Consolidated Balance Sheets Category	September 30, 2020		December 31, 2019
		Amount
Operating lease right-of-use asset	Premises and equipment	$	35,963	$	45,381
Finance lease right-of-use asset	Other assets	1,069		2,188
Operating lease liability	Accrued expenses and other liabilities	40,833		49,292
Finance lease liability	Other long-term funding	1,165		2,209

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


	September 30, 2020					December 31, 2019
($ in Thousands)	Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate		Lease payments		Weighted-average lease term (in years)	Weighted-average discount rate
Operating leases
Equipment	$	386	2.74	0.47	%	$	46	0.83	2.72	%
Retail and corporate offices	38,593		5.90	3.07	%	48,940		6.49	3.34	%
Land	6,650		9.09	3.35	%	6,594		9.57	3.21	%
Total operating leases	$	45,630	6.32	3.28	%	$	55,580	6.83	3.32	%
Finance leases
Land	$	1,185	1.89	1.05	%	$	4,827	39.67	3.99	%
Total finance leases	$	1,185	1.89	1.05	%	$	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		Amount
Three Months Ending December 31, 2020	$	2,675	$	40	$	2,715
2021	10,158		172		10,330
2022	7,801		973		8,774
2023	5,559		—		5,559
2024	4,793		—		4,793
Beyond 2024	14,643		—		14,643
Total lease payments	$	45,630	$	1,185	$	46,815
Less: interest	4,797		20		4,817
Present value of lease payments	$	40,833	$	1,165	$	41,998

As of September 30, 2020 and December 31, 2019, additional operating leases, primarily retail and corporate offices, that have not yet commenced total $18 million and $16 million, respectively. These operating leases will commence between October 2020 and October 2023 with lease terms of 1 years to 6 years.