Leases

3 Months Ended

Mar. 31, 2021

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. The components of lease expense and other lease information as of and during the three-month periods ended March 31, 2021 and 2020 are as follows:

	For the Three Months
	Ended March 31,
(in thousands)	2021			2020
Operating lease cost	$	1,351		$	1,406
Variable lease cost		384			355
Sublease income		(123	)		—
Total lease cost	$	1,612		$	1,761

Cash paid for amounts included in measurement of lease liabilities
Operating cash outflows from operating leases	$	1,488		$	1,486

ROU assets obtained in exchange for new operating lease liabilities	$	58		$	15

Reduction to ROU assets resulting from reduction to lease liabilities	$	59		$	—

Other non-cash reductions to ROU assets	$	—		$	1,192

(in thousands)	March 31, 2021			December 31, 2020
Operating lease ROU assets	$	14,952		$	16,200
Operating lease liabilities	$	17,676		$	19,072
Weighted-average remaining lease term - operating leases	3.68		years	3.87		years
Weighted-average discount rate - operating leases		2.33	%		2.32	%

Future minimum lease payments under non-cancellable leases as of March 31, 2021 were as follows:

(in thousands)	March 31, 2021
2021	$	4,466
2022		5,941
2023		4,424
2024		2,334
2025		802
2026		242
Thereafter		321
Total future minimum lease payments	$	18,530
Less imputed interest		(854	)
Total operating lease liability	$	17,676