LEASES

3 Months Ended

Jun. 30, 2020

Leases

LEASES

7. LEASES

Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease cost for future minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease cost is expensed in the period in which the obligation is incurred. Sublease income is recognized on a straight-line basis over the sublease term.

The Company’s operating lease obligations are for branch office facilities. Our leases have remaining lease terms of 1 to 15 years. The components of lease expense and other lease information as of and during the three and six-month periods ended June 30, 2020 and 2019 are as follows:

	For the Three-Month Periods				For the Six-Month Periods
	Ended June 30,				Ended June 30,
(in thousands)	2020		2019		2020		2019
Operating lease cost	$	1,370	$	1,445	$	2,776	$	2,927
Variable lease cost		320		892		675		1,210
Sublease income		(42)		-		(42)		-
Total lease cost	$	1,648	$	2,337	$	3,409	$	4,137
Cash paid for amounts included in measurement of lease liabilities
Operating cash outflows from operating leases	$	1,503	$	1,402	$	2,990	$	2,797
ROU assets obtained in exchange for new operating lease liabilities	$	-	$	231	$	15	$	951
Reduction to ROU assets resulting from reduction to lease liabilities	$	-	$	1,279	$	-	$	1,279
Other non-cash reductions to ROU assets	$	-	$	-	$	1,192	$	-

(in thousands)	June 30, 2020			December 31, 2019
Operating lease ROU assets	$	18,648		$	22,335
Operating lease liabilities	$	21,766		$	24,475
Weighted-average remaining lease term - operating leases		4.26	years		4.69	years
Weighted-average discount rate - operating leases		2.34	%		2.33	%

Future minimum lease payments under non-cancellable leases as of June 30, 2020 were as follows:

(in thousands)	June 30, 2020
2020	$	3,002
2021		5,976
2022		5,904
2023		4,386
2024		2,334
Thereafter		1,365
Total future minimum lease payments	$	22,967
Less imputed interest		(1,201)
Total operating lease liability	$	21,766