Leases

9 Months Ended

Sep. 30, 2024

Note 14: Leases

The Company has operating and finance leases for certain banking offices and land under noncancelable agreements. Our leases have remaining lease terms that vary from less than one year up to 28 years, some of which include options to extend the leases for various renewal periods. All options to renew are included in the current lease term when we believe it is reasonably certain that the renewal options will be exercised.

The components of lease expense are as follows:


	For the three months ended				For the nine months ended
(In thousands)	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Operating lease cost	$	49	$	53	$	148	$	170
Finance lease cost		186		56		583		167

Supplemental cash flow information related to leases was as follows:


	For the three months ended				For the nine months ended
(In thousands)	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Cash paid for amount included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	46	$	48	$	137	$	156
Operating cash flows for finance leases		186		56		583		167
Financing cash flows for finance leases		92		31		156		93

Supplemental balance sheet information related to leases was as follows:



(In thousands, except lease term and discount rate)	September 30, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	$	1,425		$	1,526
Operating lease liabilities		1,621			1,711

Finance Leases:
Finance lease right-of-use assets	$	16,873		$	4,073
Finance lease liabilities		16,829			4,381

Weighted Average Remaining Lease Term:
Operating Leases		17.10		17.22 years
Finance Leases		23.42		27.35 years

Weighted Average Discount Rate:
Operating Leases		3.89	%		3.88	%
Finance Leases		8.25	%		9.40	%

Maturities of lease liabilities are as follows:


Twelve Months Ending September 30,
(In thousands)
2025	$	109
2026		474
2027		493
2028		520
2029		520
Thereafter		16,334
Total minimum lease payments	$	18,450

The increase from December 31, 2023 to September 30, 2024 for finance leases was entirely driven by the acquisition of our East Syracuse branch. The Company assumed Berkshire Bank’s existing commercial lease, for the real property associated with the East Syracuse branch, with an annual lease payment of approximately $946,000, excluding property taxes and certain other associated property related obligations that the Bank also assumed.

The Company owns certain properties that it leases to unaffiliated third parties at market rates. Lease rental income was $40,000 and $53,000 for the three months ended September 30, 2024 and 2023, respectively. Lease rental income was $148,000 and $149,000 for the nine months ended September 30, 2024 and 2023, respectively. The lease agreements in which the Company is the lessor are a mix of operating and finance leases.