Leases

9 Months Ended

Sep. 30, 2021

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 four of its branch offices, at market rates, from Stewart’s Shops Corp. Mr. Gary C. Dake, President of Stewart’s Shops Corp., serves as a director on the board of directors of each of Arrow and Saratoga National. Arrow also leases one administrative office from an entity controlled by Elizabeth Miller, who serves as a director on the board of directors of each of Arrow and Glens Falls National Bank and Trust Company.

The following includes quantitative data related to the Company's leases as of and for the nine months ended September 30, 2021 and September 30, 2020:


		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2021			September 30, 2020
Right-of-Use Assets	Premises and Equipment, Net	$	4,859		$	5,036
Lease Liabilities	Finance Leases	5,181			5,228

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	6,786		$	5,496
Lease Liabilities	Other Liabilities	6,965			5,577

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	146		$	148
Operating Outgoing Cash Flows From Operating Leases		571			567
Financing Outgoing Cash Flows From Finance Leases		36			26
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		2,126			294
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		28.46			29.40
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.76			13.10
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.85		%	3.27		%


Lease cost information for the Company's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	133	$	133
Interest on Lease Liabilities	48		49		146		148
Operating Lease Cost	238		214		737		624
Short-term Lease Cost	15		11		28		32
Variable Lease Cost	69		77		203		165
Total Lease Cost	$	414	$	395	$	1,247	$	1,102


Future Lease Payments at September 30, 2021 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2022	$	964	$	243
9/30/2023	928		243
9/30/2024	780		247
9/30/2025	705		259
9/30/2026	648		268
Thereafter	4,359		7,599
Total Undiscounted Cash Flows	$	8,384	$	8,859
Less: Net Present Value Adjustment	1,419		3,678
Lease Liability	$	6,965	$	5,181

Leases

LEASES (Dollars In Thousands)

The following includes quantitative data related to the Company's leases as of and for the nine months ended September 30, 2021 and September 30, 2020:


		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2021			September 30, 2020
Right-of-Use Assets	Premises and Equipment, Net	$	4,859		$	5,036
Lease Liabilities	Finance Leases	5,181			5,228

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	6,786		$	5,496
Lease Liabilities	Other Liabilities	6,965			5,577

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	146		$	148
Operating Outgoing Cash Flows From Operating Leases		571			567
Financing Outgoing Cash Flows From Finance Leases		36			26
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		2,126			294
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		28.46			29.40
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.76			13.10
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.85		%	3.27		%


Lease cost information for the Company's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	133	$	133
Interest on Lease Liabilities	48		49		146		148
Operating Lease Cost	238		214		737		624
Short-term Lease Cost	15		11		28		32
Variable Lease Cost	69		77		203		165
Total Lease Cost	$	414	$	395	$	1,247	$	1,102


Future Lease Payments at September 30, 2021 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2022	$	964	$	243
9/30/2023	928		243
9/30/2024	780		247
9/30/2025	705		259
9/30/2026	648		268
Thereafter	4,359		7,599
Total Undiscounted Cash Flows	$	8,384	$	8,859
Less: Net Present Value Adjustment	1,419		3,678
Lease Liability	$	6,965	$	5,181