Leases

6 Months Ended

Jun. 30, 2023

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 and the two subsidiary banks. Arrow also leases one administrative office from an entity controlled by Elizabeth Miller, who also serves as a Director on the Board of Directors of Arrow and the two subsidiary banks.

The following includes quantitative data related to Arrow's leases as of and for the six months ended June 30, 2023 and June 30, 2022:


		Six Months Ended
Finance Lease Amounts:	Classification	June 30, 2023			June 30, 2022
Right-of-Use Assets	Premises and Equipment, Net	$	4,549		$	4,726
Lease Liabilities	Finance Leases	5,093			5,144

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	5,134		$	6,413
Lease Liabilities	Other Liabilities	5,331			6,604

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	97		$	97
Operating Outgoing Cash Flows From Operating Leases		510			611
Financing Outgoing Cash Flows From Finance Leases		26			25
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		19			—
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		26.78			27.70
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.56			11.20
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		3.01		%	2.85		%


Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	45	$	88	$	89
Interest on Lease Liabilities	48		48		97		97
Operating Lease Cost	293		308		591		620
Short-term Lease Cost	21		13		35		23
Variable Lease Cost	48		72		121		167
Total Lease Cost	$	454	$	486	$	932	$	996


Future Lease Payments at June 30, 2023 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
6/30/2024	$	757	$	244
6/30/2025	667		257
6/30/2026	607		266
6/30/2027	555		268
6/30/2028	506		268
Thereafter	3,334		7,130
Total Undiscounted Cash Flows	$	6,426	$	8,433
Less: Net Present Value Adjustment	1,095		3,340
Lease Liability	$	5,331	$	5,093

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, 2023 and June 30, 2022:


		Six Months Ended
Finance Lease Amounts:	Classification	June 30, 2023			June 30, 2022
Right-of-Use Assets	Premises and Equipment, Net	$	4,549		$	4,726
Lease Liabilities	Finance Leases	5,093			5,144

Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	5,134		$	6,413
Lease Liabilities	Other Liabilities	5,331			6,604

Other Information:

Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	97		$	97
Operating Outgoing Cash Flows From Operating Leases		510			611
Financing Outgoing Cash Flows From Finance Leases		26			25
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		19			—
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		26.78			27.70
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		11.56			11.20
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		3.01		%	2.85		%


Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	45	$	88	$	89
Interest on Lease Liabilities	48		48		97		97
Operating Lease Cost	293		308		591		620
Short-term Lease Cost	21		13		35		23
Variable Lease Cost	48		72		121		167
Total Lease Cost	$	454	$	486	$	932	$	996


Future Lease Payments at June 30, 2023 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
6/30/2024	$	757	$	244
6/30/2025	667		257
6/30/2026	607		266
6/30/2027	555		268
6/30/2028	506		268
Thereafter	3,334		7,130
Total Undiscounted Cash Flows	$	6,426	$	8,433
Less: Net Present Value Adjustment	1,095		3,340
Lease Liability	$	5,331	$	5,093