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Operating lease commitments and contingencies

12 Months Ended

Dec. 31, 2021

Operating lease commitments and contingencies

Operating lease commitments and contingencies

7. Operating lease commitments and contingencies:

The Company is obligated under non-cancelable operating leases for certain branch locations. We determine if an arrangement is a lease at inception by assessing whether a contract contains a right to control an identified asset for a

period of time in exchange for consideration. For all leases, we recognize a right-of-use asset and lease liability at the effective date of the lease. Operating leases right-of-use assets are included in premises and equipment, and lease liabilities are included in other liabilities in the consolidated balance sheet commencing at January 1, 2019. We have no finance leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term.

Certain leases include options to renew, with renewal terms generally containing one or more five-year renewal options. At December 31, 2021, the Company’s leases have remaining renewal terms that can extend the lease term from seven years to thirty-one years that are reasonably certain of being exercised. The weighted average remaining lease term at December 31, 2021 is sixteen years. At December 31, 2020, the weighted average remaining lease term was thirteen years. The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption. The discount rate used for two new leases added in 2021 was the annual percentage increase outlined in the terms of each lease. At December 31, 2021, discount rates ranged from 1.60% to 3.85% with an-average discount rate of 2.99%. At December 31, 2020, discount rates ranged from 1.95% to 3.85% with an average discount rate of 3.19%.

At December 31, 2021, right-of-use assets of $8,563 were included in premises and equipment, and the related lease liability totaled $8,790 and was included in other liabilities in the consolidated balance sheet. Right-of-use assets and the related lease liability were $6,282 and $6,425, respectively, at December 31, 2020. The lease liability increased at December 31, 2021 due to the addition of two new leases, one for the relocation of our Binghamton branch to a newly constructed facility and one for the opening of our newest branch in Piscataway, New Jersey. The initial increase to the lease liability for the two new leases totaled $2,731. Offsetting the lease liability were payments of $644 offset by lease expense of $278. One additional lease was entered into and added $899 to the liability in 2020. Rent expense for the years ended December 31, 2021, 2020 and 2019 amounted to $760, $727, and $670, respectively, and is included in occupancy expenses.

Future minimum lease payments under operating leases are summarized as follows:


2022	$	791
2023		736
2024		669
2025		688
2026		691
Thereafter		7,914
Total future minimum lease payments		11,489
Less amount representing interest		(2,699)
Present value of future minimum lease payments	$	8,790