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LEASES
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
LEASES
8. LEASES
As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business.
Lessee
The Company's ongoing leases have remaining lease terms of less than one year to 22 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated Statements of Financial Condition. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the unaudited Consolidated Statements of Income. The Company accounts for lease components separately from nonlease components. The Company subleases certain real estate to third parties.
The components of operating lease cost were as follows:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Operating lease cost (1)
$3,077 $4,900 $12,593 $15,289 
Sublease income(37)(51)(118)(222)
Net lease cost$3,040 $4,849 $12,475 $15,067 
(1)Includes variable lease cost and short-term lease cost.
Supplemental information related to operating leases was as follows:
(Dollars in thousands)September 30, 2023December 31, 2022
Right-of-use assets$127,020 $138,182 
Lease liabilities$147,102 $158,269 
Lease term and discount rate
Weighted average remaining lease term (in years)12.8217.91
Weighted average discount rate5.18 %4.25 %
Maturities of operating lease liabilities were as follows:
(Dollars in thousands)September 30, 2023
Remaining in 2023$4,652 
202417,259 
202517,014 
202616,176 
202714,865 
After 2027135,220 
Total lease payments205,186 
Less: Interest(58,084)
Present value of lease liabilities$147,102 
Supplemental cash flow information related to operating leases was as follows:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$4,041 $5,196 $14,235 $15,911 
Right of use assets obtained in exchange for new operating lease liabilities (non-cash)— — — 13,707 
As of September 30, 2023, the Corporation had not entered into any material leases that have not yet commenced.
Lessor Equipment Leasing
The Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance®. Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the unaudited Consolidated Statements of Income. The allowance for credit losses on finance leases is included in Provision for credit losses on the unaudited Consolidated Statements of Income.
The components of direct finance lease income are summarized in the table below:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Direct financing leases:
Interest income on lease receivable$13,682 $10,822 $39,200 $30,885 
Interest income on deferred fees and costs, net(1,643)(925)(4,479)(2,422)
Total direct financing lease net interest income$12,039 $9,897 $34,721 $28,463 
Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:
(Dollars in thousands)September 30, 2023December 31, 2022
Lease receivables$698,729 $642,369 
Unearned income(108,629)(95,683)
Deferred fees and costs15,598 12,295 
Net investment in direct financing leases$605,698 $558,981 
LEASES
8. LEASES
As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business.
Lessee
The Company's ongoing leases have remaining lease terms of less than one year to 22 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated Statements of Financial Condition. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the unaudited Consolidated Statements of Income. The Company accounts for lease components separately from nonlease components. The Company subleases certain real estate to third parties.
The components of operating lease cost were as follows:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Operating lease cost (1)
$3,077 $4,900 $12,593 $15,289 
Sublease income(37)(51)(118)(222)
Net lease cost$3,040 $4,849 $12,475 $15,067 
(1)Includes variable lease cost and short-term lease cost.
Supplemental information related to operating leases was as follows:
(Dollars in thousands)September 30, 2023December 31, 2022
Right-of-use assets$127,020 $138,182 
Lease liabilities$147,102 $158,269 
Lease term and discount rate
Weighted average remaining lease term (in years)12.8217.91
Weighted average discount rate5.18 %4.25 %
Maturities of operating lease liabilities were as follows:
(Dollars in thousands)September 30, 2023
Remaining in 2023$4,652 
202417,259 
202517,014 
202616,176 
202714,865 
After 2027135,220 
Total lease payments205,186 
Less: Interest(58,084)
Present value of lease liabilities$147,102 
Supplemental cash flow information related to operating leases was as follows:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$4,041 $5,196 $14,235 $15,911 
Right of use assets obtained in exchange for new operating lease liabilities (non-cash)— — — 13,707 
As of September 30, 2023, the Corporation had not entered into any material leases that have not yet commenced.
Lessor Equipment Leasing
The Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance®. Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the unaudited Consolidated Statements of Income. The allowance for credit losses on finance leases is included in Provision for credit losses on the unaudited Consolidated Statements of Income.
The components of direct finance lease income are summarized in the table below:
Three months endedNine months ended
(Dollars in thousands)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Direct financing leases:
Interest income on lease receivable$13,682 $10,822 $39,200 $30,885 
Interest income on deferred fees and costs, net(1,643)(925)(4,479)(2,422)
Total direct financing lease net interest income$12,039 $9,897 $34,721 $28,463 
Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:
(Dollars in thousands)September 30, 2023December 31, 2022
Lease receivables$698,729 $642,369 
Unearned income(108,629)(95,683)
Deferred fees and costs15,598 12,295 
Net investment in direct financing leases$605,698 $558,981