LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

LEASES

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of December 31, 2022, the weighted average remaining lease term was 8.6 years with a weighted average discount rate of 3.35%. Rent expense was 1.0 million for each of the years ended December 31, 2022 and 2021, respectively. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees. The Corporation's operating lease obligation increased $0.8 million as of December 31, 2021 due to modification agreements, the addition of a new location in Clarence, New York, and the relocation of an existing branch location in Bath, New York.

Leased branch properties at December 31, 2022 and December 31, 2021 consist of the following (in thousands):

	December 31, 2022		December 31, 2021
Operating lease right-of-use asset	$	7,234	$	7,145
Less: accumulated amortization	(785)		(759)
Less: lease termination	—		(313)
Add: new lease agreement and modifications	$	—	$	1,161
Operating lease right-of-use-assets, net	$	6,449	$	7,234

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of December 31, 2022 (in thousands):

Year	Amount
2023	$	992
2024	924
2025	841
2026	845
2027	854
2028 and thereafter	3,167
Total minimum lease payments	7,623
Less: amount representing interest	(1,003)
Present value of net minimum lease payments	$	6,620

As of December 31, 2022, the Corporation had no operating leases that were signed, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of December 31, 2022, the weighted average remaining lease term was 10.2 years years with a weighted average discount rate of 3.39%. The Corporation has included these leases in premises and equipment as of December 31, 2022 and December 31, 2021.

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of December 31, 2022 (in thousands):

Year	Amount
2023	$	391
2024	391
2025	409
2026	425
2027	428
2028 and thereafter	1,988
Total minimum lease payments	4,032
Less: amount representing interest	(705)
Present value of net minimum lease payments	$	3,327

As of December 31, 2022, the Corporation had no finance leases that were signed, but had not yet commenced.

LEASES

LEASES

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of December 31, 2022, the weighted average remaining lease term was 8.6 years with a weighted average discount rate of 3.35%. Rent expense was 1.0 million for each of the years ended December 31, 2022 and 2021, respectively. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees. The Corporation's operating lease obligation increased $0.8 million as of December 31, 2021 due to modification agreements, the addition of a new location in Clarence, New York, and the relocation of an existing branch location in Bath, New York.

Leased branch properties at December 31, 2022 and December 31, 2021 consist of the following (in thousands):

	December 31, 2022		December 31, 2021
Operating lease right-of-use asset	$	7,234	$	7,145
Less: accumulated amortization	(785)		(759)
Less: lease termination	—		(313)
Add: new lease agreement and modifications	$	—	$	1,161
Operating lease right-of-use-assets, net	$	6,449	$	7,234

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of December 31, 2022 (in thousands):

Year	Amount
2023	$	992
2024	924
2025	841
2026	845
2027	854
2028 and thereafter	3,167
Total minimum lease payments	7,623
Less: amount representing interest	(1,003)
Present value of net minimum lease payments	$	6,620

As of December 31, 2022, the Corporation had no operating leases that were signed, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of December 31, 2022, the weighted average remaining lease term was 10.2 years years with a weighted average discount rate of 3.39%. The Corporation has included these leases in premises and equipment as of December 31, 2022 and December 31, 2021.

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of December 31, 2022 (in thousands):

Year	Amount
2023	$	391
2024	391
2025	409
2026	425
2027	428
2028 and thereafter	1,988
Total minimum lease payments	4,032
Less: amount representing interest	(705)
Present value of net minimum lease payments	$	3,327

As of December 31, 2022, the Corporation had no finance leases that were signed, but had not yet commenced.