Affinity Bancshares, Inc. Leases Disclosure
(6) Leases
Substantially all of the leases in which the Company is the lessee are comprised of real estate for branches and office space with terms extending through 2027. The following table represents the consolidated balance sheet classification of the Company’s ROU assets and liabilities.
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Classification |
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December 31, 2025 |
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December 31, 2024 |
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Assets |
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Operating lease right-of-use assets |
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$ |
709 |
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$ |
1,265 |
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Liabilities |
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Operating lease liabilities |
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$ |
911 |
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$ |
1,583 |
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The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated balance sheet.
The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term.
For the years ended December 31, 2025 and 2024 operating lease cost was $552,000 and $559,000, respectively. As of December 31, 2025, the weighted average remaining lease term was 1.5 years and the weighted average discount rate was 1.89%. The following table represents the future maturities of the Company’s operating lease liabilities and other lease information (in thousands).
Years ending December 31, |
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Lease Liability |
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2026 |
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$ |
579 |
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2027 |
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346 |
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Total lease payments |
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925 |
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Less: interest |
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14 |
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Present value of lease liabilities |
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$ |
911 |
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Supplemental Lease Information: |
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December 31, 2025 |
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December 31, 2024 |
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Cash paid for amounts included in the measurement of lease liabilities: |
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Operating cash flows from operating leases (cash payments) |
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$ |
564 |
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$ |
610 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 20, 2026 | Showing above |
| 2024 | Mar 21, 2025 | |
| 2023 | Mar 21, 2024 | |
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.