Right-Of-Use Lease Assets and Lease Liabilities

12 Months Ended

Dec. 31, 2019

Right-Of-Use Lease Assets and Lease Liabilities

RIGHT-OF-USE LEASE ASSETS AND LEASE LIABILITIES

As of the first quarter 2019, the Company accounts for its leases in accordance with ASC Topic 842, Leases, which requires recognition of most leases, including operating leases, with a term greater than 12 months on the balance sheet. At lease commencement, the lease contract is reviewed to determine whether the contract is a finance lease or an operating lease; a lease liability is recognized on a discounted basis, related to the Company’s obligation to make lease payments; and a right-of-use asset is also recognized related to the Company’s right to use, or control the use of, a specified asset for the lease term. The Company accounts for lease and non-lease components (such as taxes, insurance and common area maintenance costs) separately as such amounts are generally readily determinable under the lease contracts. Lease payments over the expected term are discounted using the Company’s FHLB advance rates for borrowings of similar term. If it is reasonably certain that a renewal or termination option will be exercised, the effects of such options are included in the determination of the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company’s leases are classified as operating leases with a term, including expected renewal or termination options, greater than one year, and are related to certain office facilities and office equipment. As of December 31, 2019, right-of-use lease assets included in premises and equipment are $40.7 million and lease liabilities included in other liabilities are $40.9 million.

Other information related to the Company’s operating leases is presented in the table below:



	2019			2018		2017
Operating lease cost for the years ended December 31	$	13,560,000		$	13,378,000	$	7,780,000

Weighted average remaining lease term	8.37 years
Weighted average discount rate	3.27		%

The Company’s remaining undiscounted minimum lease payments on operating leases as of December 31, 2019 are as follows:



Year	(In thousands)
2020	$	10,071
2021	8,394
2022	7,095
2023	5,236
2024	3,345
Thereafter	13,659
Total undiscounted minimum lease payments	47,800
Less: Net present value adjustment	6,946
Lease liability included in other liabilities	$	40,854

See Note 20, New Accounting Standards, for additional information related to the adoption of ASC Topic 842.