Leases

3 Months Ended

Mar. 31, 2021

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

These 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 March 31,
($ in Thousands)	2021		2020
Operating lease costs	$	2,240	$	2,623
Finance lease costs	39		36
Operating lease cash flows	2,963		2,731
Finance lease cash flows	40		21

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


($ in Thousands)	Consolidated Balance Sheets Category	March 31, 2021		December 31, 2020
		Amount
Operating lease right-of-use asset	Premises and equipment	$	32,071	$	31,994
Finance lease right-of-use asset	Other assets	854		962
Operating lease liability	Accrued expenses and other liabilities	36,079		36,425
Finance lease liability	Other long-term funding	1,091		1,128

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


	March 31, 2021					December 31, 2020
($ 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	$	385	2.24	0.46	%	$	386	2.49	0.46	%
Retail and corporate offices	33,707		5.94	3.27	%	34,036		6.04	3.33	%
Land	6,165		8.83	3.10	%	6,385		8.99	3.09	%
Total operating leases	$	40,257	6.33	3.22	%	$	40,806	6.45	3.27	%
Finance leases
Land	$	1,105	1.40	1.05	%	$	1,145	1.65	1.05	%
Total finance leases	$	1,105	1.40	1.05	%	$	1,145	1.65	1.05	%

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
Nine Months Ending December 31, 2021	$	6,591	$	132	$	6,724
2022	7,111		973		8,084
2023	6,010		—		6,010
2024	5,274		—		5,274
2025	4,110		—		4,110
Beyond 2025	11,160		—		11,160
Total lease payments	$	40,257	$	1,105	$	41,362
Less: interest	4,178		14		4,192
Present value of lease payments	$	36,079	$	1,091	$	37,170

As of March 31, 2021 and December 31, 2020, additional operating leases, primarily retail and corporate offices, that had not yet commenced totaled $15 million and $17 million, respectively. The leases that had not yet commenced as of March 31, 2021, will commence between April 2021 and October 2023 with lease terms of 1 year to 6 years.