XML 27 R14.htm IDEA: XBRL DOCUMENT

Operating lease commitments and contingencies

12 Months Ended

Dec. 31, 2022

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, 2022, 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, 2022 is 17.1 years. At December 31, 2021, the weighted average remaining lease term was 16 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 leases added subsequently was the annual percentage increase outlined in the terms of each lease. There were no new leases added in 2022 and two new leases added in 2021. At December 31, 2022 and December 31, 2021, discount rates ranged from 1.60 percent to 3.85 percent with an average discount rate of 3.0 percent and 2.99 percent respectively.

At December 31, 2022, right-of-use assets of $8.0 million were included in premises and equipment, and the related lease liability totaled $8.3 million was included in other liabilities in the consolidated balance sheet. Right-of-use assets and the related lease liability were $8.6 million and $8.8 million, respectively, at December 31, 2021. There were no new leases in 2022, and one lease, for the previous Binghamton, NY branch, was not renewed. Rent expense for the years ended December 31, 2022, 2021 and 2020 amounted to $1.0 million, $760 thousand, and $727 thousand, respectively, and is included in occupancy expenses.

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


(Dollars in thousands)
2023	$	736
2024		669
2025		688
2026		691
2027		617
Thereafter		7,297
Total future minimum lease payments		10,698
Less amount representing interest		(2,398)
Present value of future minimum lease payments	$	8,300