Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

LEASES (Dollars In Thousands)

The Company is a lessee in its leases, which are mainly for financial services locations in addition to leases for corporate vehicles. These leases generally require the Company to pay third-party expenses on behalf of the Lessor, which are referred to as variable payments. Under some leases, the Company pays the variable payments to the lessor, and in other leases, the Company pays the variable payments directly to the applicable third party. None of the Company's current leases include any residual value guarantees or any subleases, and there are no significant rights and obligations of the Company for leases that have not commenced as of the reporting date.

Arrow leases five of its branch offices, at market rates, from Stewart’s Shops Corp.  Mr. Gary C. Dake, President of Stewart’s Shops Corp., serves on both the boards of Arrow and Saratoga National Bank and Trust Company.

The following includes quantitative data related to the Company's leases as of March 31, 2019:

Finance Lease Amounts:	Classification
Right-of-use Assets	Premises and Equipment, Net	$	2,922
Lease Liabilities	Finance Leases	2,946
Operating Lease Amounts:
Right-of-use Assets	Other Assets	$	5,587
Lease Liabilities	Other Liabilities	5,639
Lease Cost:
Finance Lease Cost:
Amortization of Right-of-use assets		$	17
Interest on Lease Liabilities		15
Operating Lease Cost		173
Short-term Lease Cost		33
Variable Lease Cost		56
Total Lease Cost		$	294
Other Information:
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	15
Operating Outgoing Cash Flows From Operating Leases		173
Financing Outgoing Cash Flows From Finance Leases		4
Right-of-use Assets Obtained In Exchange For New Finance Lease Liabilities		2,939
Right-of-use Assets Obtained In Exchange For New Operating Lease Liabilities		5,725
Weighted-average Remaining Lease Term—Finance Leases (Yrs.)		26.91
Weighted-average Remaining Lease Term—Operating Leases (Yrs.)		14.63
Weighted-average Discount Rate—Finance Leases %		3.82		%
Weighted-average Discount Rate—Operating Leases %		3.50		%

Future Lease Payments at March 31, 2019 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
3/31/2020	$	769	$	143
3/31/2021	695		146
3/31/2022	557		149
3/31/2023	479		149
3/31/2024	462		149
Thereafter	4,346		4,200
Total Undiscounted Cash Flows	$	7,308	$	4,936
Less: Net Present Value Adjustment	1,669		1,990
Lease Liability	$	5,639	$	2,946

Arrow adopted ASU 2016-02 using a modified retrospective adoption at January 1. 2019 as discussed in Note 1. The following disclosure is provided for the period prior to the adoption.

Future minimum lease payments on operating leases at December 31, 2018 were as follows:

	Operating Leases
2019	$	857
2020	626
2021	497
2022	357
2023	286
2024 and beyond	2,776
Total Minimum Lease Payments	$	5,399

Leases

LEASES (Dollars In Thousands)

The Company is a lessee in its leases, which are mainly for financial services locations in addition to leases for corporate vehicles. These leases generally require the Company to pay third-party expenses on behalf of the Lessor, which are referred to as variable payments. Under some leases, the Company pays the variable payments to the lessor, and in other leases, the Company pays the variable payments directly to the applicable third party. None of the Company's current leases include any residual value guarantees or any subleases, and there are no significant rights and obligations of the Company for leases that have not commenced as of the reporting date.

Arrow leases five of its branch offices, at market rates, from Stewart’s Shops Corp.  Mr. Gary C. Dake, President of Stewart’s Shops Corp., serves on both the boards of Arrow and Saratoga National Bank and Trust Company.

The following includes quantitative data related to the Company's leases as of March 31, 2019:

Finance Lease Amounts:	Classification
Right-of-use Assets	Premises and Equipment, Net	$	2,922
Lease Liabilities	Finance Leases	2,946
Operating Lease Amounts:
Right-of-use Assets	Other Assets	$	5,587
Lease Liabilities	Other Liabilities	5,639
Lease Cost:
Finance Lease Cost:
Amortization of Right-of-use assets		$	17
Interest on Lease Liabilities		15
Operating Lease Cost		173
Short-term Lease Cost		33
Variable Lease Cost		56
Total Lease Cost		$	294
Other Information:
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	15
Operating Outgoing Cash Flows From Operating Leases		173
Financing Outgoing Cash Flows From Finance Leases		4
Right-of-use Assets Obtained In Exchange For New Finance Lease Liabilities		2,939
Right-of-use Assets Obtained In Exchange For New Operating Lease Liabilities		5,725
Weighted-average Remaining Lease Term—Finance Leases (Yrs.)		26.91
Weighted-average Remaining Lease Term—Operating Leases (Yrs.)		14.63
Weighted-average Discount Rate—Finance Leases %		3.82		%
Weighted-average Discount Rate—Operating Leases %		3.50		%

Future Lease Payments at March 31, 2019 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
3/31/2020	$	769	$	143
3/31/2021	695		146
3/31/2022	557		149
3/31/2023	479		149
3/31/2024	462		149
Thereafter	4,346		4,200
Total Undiscounted Cash Flows	$	7,308	$	4,936
Less: Net Present Value Adjustment	1,669		1,990
Lease Liability	$	5,639	$	2,946

Arrow adopted ASU 2016-02 using a modified retrospective adoption at January 1. 2019 as discussed in Note 1. The following disclosure is provided for the period prior to the adoption.

Future minimum lease payments on operating leases at December 31, 2018 were as follows:

	Operating Leases
2019	$	857
2020	626
2021	497
2022	357
2023	286
2024 and beyond	2,776
Total Minimum Lease Payments	$	5,399