Pathfinder Bancorp, Inc. Leases Disclosure
NOTE 28: LEASES
The Company has operating and finance leases for certain banking offices and land under noncancelable agreements. Our leases have remaining lease terms that vary from less than one year up to twenty-eight years, some of which include options to extend the leases for various renewal periods. All options to renew are included in the current lease term when it is reasonably certain that the renewal options will be exercised. In July 2024, the Company acquired a finance lease with a fair value of approximately $13.0 million and assumed a finance lease liability of $12.5 million in connection with the acquisition of the East Syracuse Branch from Berkshire Bank.
The components of lease expense are as follows:
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|
For the years ended |
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(In thousands) |
|
December 31, 2024 |
|
|
December 31, 2023 |
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||
Operating lease cost |
|
$ |
198 |
|
|
$ |
219 |
|
Finance lease cost |
|
|
1,019 |
|
|
|
435 |
|
Supplemental cash flow information related to leases was as follows:
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|
For the years ended |
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|||||
(In thousands) |
|
December 31, 2024 |
|
|
December 31, 2023 |
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||
Cash paid for amount included in the measurement of lease liabilities: |
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Operating cash flows from operating leases |
|
$ |
182 |
|
|
$ |
201 |
|
Operating cash flows from finance leases |
|
|
1,019 |
|
|
|
435 |
|
Financing cash flows from finance leases |
|
|
261 |
|
|
|
125 |
|
Supplemental balance sheet information related to leases was as follows:
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|
|
|
|
|
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||
(In thousands, except lease term and discount rate) |
|
December 31, 2024 |
|
|
December 31, 2023 |
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||
Operating Leases: |
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|
|
|
|
|
||
Operating lease right-of-use assets |
|
$ |
1,391 |
|
|
$ |
1,526 |
|
Operating lease liabilities |
|
|
1,591 |
|
|
|
1,711 |
|
|
|
|
|
|
|
|
||
Finance Leases: |
|
|
|
|
|
|
||
|
$ |
16,676 |
|
|
$ |
4,073 |
|
|
|
|
16,745 |
|
|
|
4,381 |
|
|
|
|
|
|
|
|
|
||
Weighted Average Remaining Lease Term: |
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|
|
|
|
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||
Operating leases |
|
17.08 years |
|
|
17.22 years |
|
||
Finance leases |
|
23.16 years |
|
|
27.35 years |
|
||
|
|
|
|
|
|
|
||
Weighted Average Discount Rate: |
|
|
|
|
|
|
||
Operating leases |
|
|
3.90 |
% |
|
|
3.88 |
% |
Finance leases |
|
|
8.25 |
% |
|
|
9.40 |
% |
As of December 31, maturities of lease liabilities were as follows:
Twelve Months Ending December 31, |
|
|
|
|
|
|
||
(In thousands) |
|
Operating Leases |
|
|
Finance Leases |
|
||
2025 |
|
$ |
118 |
|
|
$ |
356 |
|
2026 |
|
|
116 |
|
|
|
376 |
|
2027 |
|
|
122 |
|
|
|
397 |
|
2028 |
|
|
102 |
|
|
|
418 |
|
2029 |
|
|
70 |
|
|
|
444 |
|
Thereafter |
|
|
1,063 |
|
|
|
14,754 |
|
Total minimum lease payments |
|
$ |
1,591 |
|
|
$ |
16,745 |
|
The Company owns certain properties that it leases to unaffiliated third parties at market rates. was $194,000 and $206,000 for the years ended December 31, 2024 and 2023, respectively. All rental agreements with lessees are accounted for as operating leases.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.