Leasing

12 Months Ended

Dec. 31, 2022

Lessor Arrangements

The Company leases certain types of machinery and equipment to its customers through sales-type and direct financing leases as part of its equipment financing portfolio. These leases generally have remaining lease terms of six months to ten years, some of which include renewal options and/or options for the lessee to purchase the lease near or at the end of the least term. The Company recognized interest income from its sales-type and direct financing lessor activities of $15.4 million, $7.5 million, and $7.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Company does not have any significant operating leases in which it is the lessor. Additional information regarding the Company's equipment financing portfolio can be found within Note 4: Loans and Leases.

The following table summarizes the components of the Company's net investment in its sales-type and direct financing leases:


	At December 31,
(In thousands)	2022		2021
Lease receivables	$	330,690	$	196,632
Unguaranteed residual values	100,368		19,748
Total net investment	$	431,058	$	216,380

The following table reconciles undiscounted future lease payments to the total sales-type and direct financing leases' net investment:


(In thousands)	At December 31, 2022
2023	$	146,858
2024	91,592
2025	74,522
2026	71,950
2027	27,029
Thereafter	56,598
Total lease payments receivable	468,549
Present value adjustment	(37,491)
Total net investment	$	431,058

Lessee Arrangements

The Company enters into operating leases in the normal course of business, primarily for office space, banking centers, and other operational activities. These leases generally have remaining lease terms of one to fifteen years. The Company does not have any significant sub-leases nor finance leases in which it is the lessee.

The following table summarizes the Company's ROU lease assets and operating lease liabilities:


		At December 31,
(In thousands)	Consolidated Balance Sheet Line Item	2022		2021
ROU lease assets	Premises and equipment, net	$	191,068	$	119,926
Operating lease liabilities	Accrued expenses and other liabilities	239,281		144,804

ROU lease asset impairment charges totaled $23.1 million, $1.2 million, and $12.0 million for the years ended
December 31, 2022, 2021 and 2020, respectively, and are included in Occupancy on the accompanying Consolidated Statements of Income. The impairment charge recognized during the year ended December 31, 2022, pertained to the Company's corporate real estate consolidation plan, discussed previously in Note 6: Premises and Equipment. The amount of such impairment was calculated as the difference between the estimated fair value of the assets determined using a discounted cash flow technique, relative to their book value.

The following table summarizes the components of operating lease expense and other relevant information:


	At or for the Years ended December 31,
(In thousands)	2022			2021			2020
Lease Cost:
Operating and variable lease costs	$	44,654		$	30,936		$	35,916
Sublease income	(1,383)			(554)			(557)
Total operating lease expense	$	43,271		$	30,382		$	35,359

Other Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	44,767		$	30,487		$	31,212
ROU lease assets obtained in exchange for operating lease liabilities (1)	27,897			15,226			9,211
Weighted-average remaining lease term (in years)	7.72			7.50			8.04
Weighted-average discount rate	2.65		%	3.04		%	3.19		%

(1)Excludes ROU lease assets acquired from Sterling in the merger.

The following table reconciles undiscounted future lease payments to total operating lease liabilities:


(In thousands)	At December 31, 2022
2023	$	40,614
2024	40,808
2025	36,274
2026	32,696
2027	27,201
Thereafter	91,369
Total operating lease payments	268,962
Present value adjustment	(29,681)
Total operating lease liabilities	$	239,281