Operating Leases

12 Months Ended

Dec. 31, 2019

As of December 31, 2019, United had a right-of-use asset and lease liability of $19.9 million and $22.0 million, respectively, included in other assets and other liabilities, respectively, on the balance sheet.

The table below presents the operating lease income and expense recognized for the year ended December 31, 2019 (in thousands).



	2019		Income Statement Location
Operating lease cost	$	5,067	Occupancy expense
Variable lease cost	449		Occupancy expense
Short-term lease cost	136		Occupancy expense
Total lease cost	$	5,652

Sublease income and rental income from owned properties under operating leases	$	1,160	Other noninterest income

As of December 31, 2019, the weighted average remaining lease term and weighted average discount rate of operating leases was 5.33 years and 2.79%, respectively. Absent a readily determinable interest rate in the lease agreement, the discount rate applied to each individual lease obligation was the Bank’s incremental borrowing rate for secured borrowings.

As of December 31, 2019, future minimum lease payments under operating leases were as follows (in thousands):



Year
2020	$	4,939
2021	5,124
2022	4,694
2023	3,992
2024	1,728
Thereafter	3,364
Total	23,841
Less discount	(1,802		)
Present value of lease liability	$	22,039

As discussed in Note 2, United adopted Topic 842 using the modified retrospective method with a cumulative effect adjustment to shareholders’ equity without restating comparable periods. As a result, disclosures for comparative periods under the predecessor standard, ASC 840, Leases, are required in the year of transition. As of December 31, 2018, rent commitments under operating leases were $5.35 million, $5.16 million, $4.91 million, $4.48 million, and $3.91 million, for 2019 through 2023, respectively, and $5.04 million in the aggregate for years thereafter. Rent expense recorded in accordance with ASC 840 for the years ended December 31, 2018 and 2017 was $4.70 million and $4.32 million, respectively.