Leases

6 Months Ended

Jun. 30, 2022

LEASES (Dollars In Thousands)

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

Arrow leases two 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 Arrow, Glens Falls National 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 Arrow, Glens Falls National and Saratoga National.

The following includes quantitative data related to Arrow's leases as of and for the six months ended June 30, 2022 and June 30, 2021:


		Six Months Ended
Finance Lease Amounts:	Classification	June 30, 2022			June 30, 2021
Right-of-Use Assets	Premises and Equipment, Net	$	4,726		$	4,903
Lease Liabilities	Finance Leases	5,144			5,193

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	6,413		$	5,661
Lease Liabilities	Other Liabilities	6,604			5,832

Other Information:
(Gains) and Losses On Sale and Leaseback Transactions, Net		N/A			N/A
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	97		$	98
Operating Outgoing Cash Flows From Operating Leases		611			383
Financing Outgoing Cash Flows From Finance Leases		25			24
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		—			805
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		27.7			28.7
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.2			12.2
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.85		%	3.08		%


Lease cost information for the Company's leases is as follows:
	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	45	$	45	$	89	$	89
Interest on Lease Liabilities	48		49		97		98
Operating Lease Cost	308		290		620		499
Short-term Lease Cost	13		8		23		13
Variable Lease Cost	72		30		167		134
Total Lease Cost	$	486	$	422	$	996	$	833


Future Lease Payments at June 30, 2022 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
6/30/2023	$	1,196	$	243
6/30/2024	804		244
6/30/2025	717		257
6/30/2026	664		266
6/30/2027	612		268
Thereafter	3,897		7,398
Total Undiscounted Cash Flows	$	7,890	$	8,676
Less: Net Present Value Adjustment	1,286		3,532
Lease Liability	$	6,604	$	5,144

Leases

LEASES (Dollars In Thousands)

The following includes quantitative data related to Arrow's leases as of and for the six months ended June 30, 2022 and June 30, 2021:


		Six Months Ended
Finance Lease Amounts:	Classification	June 30, 2022			June 30, 2021
Right-of-Use Assets	Premises and Equipment, Net	$	4,726		$	4,903
Lease Liabilities	Finance Leases	5,144			5,193

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	6,413		$	5,661
Lease Liabilities	Other Liabilities	6,604			5,832

Other Information:
(Gains) and Losses On Sale and Leaseback Transactions, Net		N/A			N/A
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	97		$	98
Operating Outgoing Cash Flows From Operating Leases		611			383
Financing Outgoing Cash Flows From Finance Leases		25			24
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		—			805
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		27.7			28.7
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.2			12.2
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.85		%	3.08		%


Lease cost information for the Company's leases is as follows:
	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	45	$	45	$	89	$	89
Interest on Lease Liabilities	48		49		97		98
Operating Lease Cost	308		290		620		499
Short-term Lease Cost	13		8		23		13
Variable Lease Cost	72		30		167		134
Total Lease Cost	$	486	$	422	$	996	$	833


Future Lease Payments at June 30, 2022 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
6/30/2023	$	1,196	$	243
6/30/2024	804		244
6/30/2025	717		257
6/30/2026	664		266
6/30/2027	612		268
Thereafter	3,897		7,398
Total Undiscounted Cash Flows	$	7,890	$	8,676
Less: Net Present Value Adjustment	1,286		3,532
Lease Liability	$	6,604	$	5,144