Leases

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Leases

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.   Additionally on June 14th, 2024, Arrow entered into a sale-leaseback agreement with Stewart’s Shops Corp. for a bank branch location. The sale price of the property was $1.1 million which resulted in a gain of $377 thousand. The lease agreement began in June 2024 and runs through May 2029, with rent totaling $5 thousand per month for the remainder of the lease. Mr. Gary C. Dake, President of Stewart’s Shops Corp., serves as a Director on the Board of Directors of Arrow and its two subsidiary banks.

The following includes quantitative data related to Arrow's leases as of and for the nine months ended September 30, 2024 and September 30, 2023:

		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2024			September 30, 2023
Right-of-Use Assets	Premises and Equipment, Net	$	4,327		$	4,504
Lease Liabilities	Finance Leases	5,022			5,080
Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	4,792		$	4,978
Lease Liabilities	Other Liabilities	5,007			5,179
Other Information:
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	142		$	143
Operating Outgoing Cash Flows From Operating Leases		471			781
Financing Outgoing Cash Flows From Finance Leases		44			39
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		326			19
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		25.58			26.54
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		10.44			11.45
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		3.37		%	3.01		%

Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	132	$	132
Interest on Lease Liabilities	47		46		142		143
Operating Lease Cost	203		195		597		786
Short-term Lease Cost	7		11		28		46
Variable Lease Cost	32		58		177		179
Total Lease Cost	$	333	$	354	$	1,076	$	1,286

Future Lease Payments at September 30, 2024 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2025	$	796	$	258
9/30/2026	715		268
9/30/2027	659		268
9/30/2028	549		268
9/30/2029	534		273
Thereafter	2,745		6,791
Total Undiscounted Cash Flows	$	5,998	$	8,126
Less: Net Present Value Adjustment	991		3,104
Lease Liability	$	5,007	$	5,022

Leases

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.   Additionally on June 14th, 2024, Arrow entered into a sale-leaseback agreement with Stewart’s Shops Corp. for a bank branch location. The sale price of the property was $1.1 million which resulted in a gain of $377 thousand. The lease agreement began in June 2024 and runs through May 2029, with rent totaling $5 thousand per month for the remainder of the lease. Mr. Gary C. Dake, President of Stewart’s Shops Corp., serves as a Director on the Board of Directors of Arrow and its two subsidiary banks.

The following includes quantitative data related to Arrow's leases as of and for the nine months ended September 30, 2024 and September 30, 2023:

		Nine Months Ended
Finance Lease Amounts:	Classification	September 30, 2024			September 30, 2023
Right-of-Use Assets	Premises and Equipment, Net	$	4,327		$	4,504
Lease Liabilities	Finance Leases	5,022			5,080
Operating Lease Amounts:
Right-of-Use Assets	Other Assets	$	4,792		$	4,978
Lease Liabilities	Other Liabilities	5,007			5,179
Other Information:
Cash Paid For Amounts Included In The Measurement Of Lease Liabilities:
Operating Outgoing Cash Flows From Finance Leases		$	142		$	143
Operating Outgoing Cash Flows From Operating Leases		471			781
Financing Outgoing Cash Flows From Finance Leases		44			39
Right-of-Use Assets Obtained In Exchange For New Finance Lease Liabilities		—			—
Right-of-Use Assets Obtained In Exchange For New Operating Lease Liabilities		326			19
Weighted-average Remaining Lease Term - Finance Leases (Yrs.)		25.58			26.54
Weighted-average Remaining Lease Term - Operating Leases (Yrs.)		10.44			11.45
Weighted-average Discount Rate—Finance Leases		3.75		%	3.75		%
Weighted-average Discount Rate—Operating Leases		3.37		%	3.01		%

Lease cost information for Arrow's leases is as follows:
	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Lease Cost:
Finance Lease Cost:
Reduction of Right-of-Use Assets	$	44	$	44	$	132	$	132
Interest on Lease Liabilities	47		46		142		143
Operating Lease Cost	203		195		597		786
Short-term Lease Cost	7		11		28		46
Variable Lease Cost	32		58		177		179
Total Lease Cost	$	333	$	354	$	1,076	$	1,286

Future Lease Payments at September 30, 2024 are as follows:
	Operating Leases		Financing Leases
Twelve Months Ended:
9/30/2025	$	796	$	258
9/30/2026	715		268
9/30/2027	659		268
9/30/2028	549		268
9/30/2029	534		273
Thereafter	2,745		6,791
Total Undiscounted Cash Flows	$	5,998	$	8,126
Less: Net Present Value Adjustment	991		3,104
Lease Liability	$	5,007	$	5,022