LEASES
We have operating leases for 1 corporate office, 3 bank branch offices,1 former bank branch office, and 1 ATM location. Our leases have remaining lease terms of 0.83 years to 2.67 years. Some of the leases include an option to extend, the longest of which is for two 5 year terms. As of December 31, 2025, we have no additional lease commitments that have not yet commenced. Lease costs are included in non-interest expense/occupancy in the consolidated statement of operations. The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.
| | | | | | | | | | | | | | |
| | Twelve Months Ended |
| | December 31, 2025 | | December 31, 2024 |
| The components of total lease costs were as follows: | | | | |
| Operating lease cost | | $ | 415 | | | $ | 450 | |
| Variable lease cost | | 81 | | | 112 | |
| Total lease cost | | $ | 496 | | | $ | 562 | |
| | | | |
| The components of total lease income were as follows: | | | | |
| Operating lease income | | $ | 85 | | | $ | 59 | |
| | | | |
| Supplemental cash flow information related to leases was as follows: | | | | |
| | | | |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 513 | | | $ | 546 | |
| Right-of-use assets obtained in exchange for lease obligations: | | | | |
| Operating leases | | $ | 304 | | | $ | 2 | |
| | | | |
| | December 31, 2025 | | December 31, 2024 |
| Supplemental balance sheet information related to leases was as follows: | | | | |
| Operating lease right-of-use assets (1) | | $ | 764 | | | $ | 815 | |
| Operating lease liabilities (2) | | $ | 950 | | | $ | 1,076 | |
| | | | |
| Weighted average remaining lease term in years; operating leases | | 2.30 | | 3.08 |
| Weighted average discount rate; operating leases | | 3.39 | % | | 3.15 | % |
(1) Operating lease right-of-use assets are recorded as other assets in the consolidated balance sheets.
(2) Operating lease liabilities are recorded as other liabilities in the consolidated balance sheets.
Cash obligations and receipts under lease contracts as of December 31, 2025, are as follows:
| | | | | | | | | | | |
| Fiscal years ending December 31, | Payments | | Receipts |
| 2026 | $ | 523 | | | $ | 43 | |
| 2027 | 458 | | | 17 | |
| 2028 | 209 | | | 16 | |
| 2029 | — | | | 11 | |
| | | |
| 2030 | — | | | — | |
| Thereafter | — | | | — | |
| Total lease payments | 1,190 | | | $ | 87 | |
| Less: effects of discounting | (240) | | | |
| Lease liability recognized | $ | 950 | | | |
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.