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PREMISES, EQUIPMENT, AND LEASES
 12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
PREMISES, EQUIPMENT, AND LEASES PREMISES, EQUIPMENT, AND LEASES
Premises and equipment consist of the following:
 As of December 31,
20202019
 (In thousands)
Leasehold improvements$56,482 $55,482 
Furniture, fixtures, and equipment66,403 56,134 
Buildings3,159 3,159 
Subtotal126,044 114,775 
Less: Accumulated depreciation81,957 70,248 
Premises and equipment, net$44,087 $44,527 
Depreciation expense related to premises and equipment was $12.2 million, $11.2 million, and $10.7 million for the years ended December 31, 2020, 2019, and 2018, respectively.
On January 1, 2019, the Company adopted ASU 2016-02. As stated in Part II. Item 8. “Notes to Consolidated Financial Statements - Note 1: Basis of Presentation and Summary of Significant Accounting Policies”, the implementation of the new standard had a material effect on the financial statements. The most significant effects relate to the recognition of operating ROU assets and operating lease liabilities on the Consolidated Balance Sheets for real estate operating leases, significant disclosures about leasing activities, and the impact of additional assets on certain financial measures, such as capital ratios and return on average asset ratios. On adoption, the Company recognized $124.1 million of lease liabilities and $108.5 million of ROU assets on the face of the balance sheet. ROU assets obtained in exchange for lease liabilities are net of tenant improvement allowances and deferred rent. There was no impact to the Company’s Consolidated Statements of Cash Flows upon adoption, since the net impact of all adjustments recorded upon transition represents non-cash activity.
The Company, as lessee, has 36 real estate leases for office and ATM locations classified as operating leases. The Company determines if an arrangement is a lease or contains a lease at inception. The terms of the real estate leases generally have annual increases in payments based off of a fixed or variable rate, such as the Consumer Price Index rate, that is outlined within the respective contracts. Generally, the initial terms of the leases for our leased properties range from five to 15 years. Most of the leases also include options to renew for periods of five to 10 years at contractually agreed upon rates or at market rates at the time of the extension. On a quarterly basis, the Company evaluates whether the renewal of each lease is reasonably certain. The Bank uses its incremental borrowing rate at the commencement date of the lease or renewal in determining the present value of lease payments. No other significant judgments or assumptions were made in applying the requirements of ASU 2016-02.
The Company, as lessee, has 24 equipment leases classified as operating leases. The terms of the equipment leases are fixed payments outlined within the respective contracts and generally range from three to five years. The Bank uses its incremental borrowing rate at the commencement date of the lease in determining the present value of lease payments. No other significant judgments or assumptions were made in applying the requirements of ASU 2016-02.
The following table presents information about the Company's leases as of the dates indicated:
Twelve months ended December 31,
20202019
(In thousands)
Lease cost
Operating lease cost$18,639 $19,004 
Short-term lease cost222 52 
Variable lease cost5 291 
Less: Sublease income(28)(101)
Total operating lease cost$18,838 $19,246 
Twelve months ended December 31,
20202019
(In thousands, except years and percentages)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$20,244 $20,230 
ROU assets obtained in exchange for new operating lease liabilities (1)$11,737 $8,131 
Weighted average remaining lease term for operating leases7.6 years8.1 years
Weighted average discount rate for operating leases3.1 %3.2 %
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(1) Operating lease liabilities were impacted by the addition of real estate and equipment leases, partially offset by real estate
lease modifications for the twelve months ended December 31, 2020.
The Company is obligated for minimum payments under non-cancelable operating leases. In accordance with the terms of these leases, the Company is currently committed to minimum annual payments as follows as of the date indicated:
 December 31, 2020
(In thousands)
2021$21,269 
202221,578 
202320,301 
202414,116 
202512,429 
Thereafter39,769 
Total future minimum lease payments$129,462 
Less: Amounts representing interest(17,123)
Present value of net future minimum lease payments$112,339 
Prior to the adoption of ASC 842, the Company’s operating leases were not recognized on the Consolidated Balance Sheets. Rent expense for the year ended December 31, 2018 was $21.3 million.