Leases

9 Months Ended

Sep. 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 nine months ended September 30, 2022 and September 30, 2021:


		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2022			September 30, 2021
Right-of-Use Assets	Premises and Equipment, Net	$	4,681		$	4,859
Lease Liabilities	Finance Leases	5,131			5,181

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	5,889		$	6,786
Lease Liabilities	Other Liabilities	6,082			6,965

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	145		$	146
Operating Outgoing Cash Flows From Operating Leases		1,041			571
Financing Outgoing Cash Flows From Finance Leases		38			36
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
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		27.50			28.46
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.36			11.76
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.87		%	2.85		%


Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	133	$	133
Interest on Lease Liabilities	48		48		145		146
Operating Lease Cost	305		238		925		737
Short-term Lease Cost	9		15		32		28
Variable Lease Cost	86		69		253		203
Total Lease Cost	$	492	$	414	$	1,488	$	1,247


Future Lease Payments at September 30, 2022 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2023	$	1,077	$	243
9/30/2024	723		247
9/30/2025	648		259
9/30/2026	590		268
9/30/2027	561		268
Thereafter	3,698		7,331
Total Undiscounted Cash Flows	$	7,297	$	8,616
Less: Net Present Value Adjustment	1,215		3,485
Lease Liability	$	6,082	$	5,131

Leases

LEASES (Dollars In Thousands)

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


		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2022			September 30, 2021
Right-of-Use Assets	Premises and Equipment, Net	$	4,681		$	4,859
Lease Liabilities	Finance Leases	5,131			5,181

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	5,889		$	6,786
Lease Liabilities	Other Liabilities	6,082			6,965

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	145		$	146
Operating Outgoing Cash Flows From Operating Leases		1,041			571
Financing Outgoing Cash Flows From Finance Leases		38			36
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
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		27.50			28.46
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.36			11.76
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		2.87		%	2.85		%


Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	133	$	133
Interest on Lease Liabilities	48		48		145		146
Operating Lease Cost	305		238		925		737
Short-term Lease Cost	9		15		32		28
Variable Lease Cost	86		69		253		203
Total Lease Cost	$	492	$	414	$	1,488	$	1,247


Future Lease Payments at September 30, 2022 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2023	$	1,077	$	243
9/30/2024	723		247
9/30/2025	648		259
9/30/2026	590		268
9/30/2027	561		268
Thereafter	3,698		7,331
Total Undiscounted Cash Flows	$	7,297	$	8,616
Less: Net Present Value Adjustment	1,215		3,485
Lease Liability	$	6,082	$	5,131