15.
LEASES

The Company is involved in a number of operating leases, primarily for branch locations. Branch leases have remaining lease terms ranging from one year to eight years, some of which include options to extend the leases for up to five years, and some of which include an option to terminate the lease within one year. The Bank also leases certain office facilities to third parties and classifies these leases as operating leases.

 

The following table provides a summary of the components of lease income and expense, as well as the reporting location in the consolidated statements of operations for the years ended December 31, 2025 and 2024:

 

 

 

 

 

 

Year Ended

 

 

 

Location

 

December 31,
2025

 

 

December 31,
2024

 

 

 

 

 

(Dollars in Thousands)

 

Operating lease income (1)

 

Lease income

 

$

1,082

 

 

$

1,033

 

Operating lease expense (2)

 

Net occupancy and equipment

 

$

459

 

 

$

565

 

 

(1)
Operating lease income includes rental income from owned properties.
(2)
Includes short-term lease costs. For the years ended December 31, 2025 and 2024, short-term lease costs were nominal in amount.

 

The following table provides supplemental lease information for operating leases on the consolidated balance sheets as of December 31, 2025 and 2024:

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

December 31,
2025

 

 

December 31,
2024

 

 

 

 

 

(Dollars in Thousands)

 

Operating lease right-of-use assets

 

Other assets

 

$

1,581

 

 

$

1,921

 

Operating lease liabilities

 

Other liabilities

 

$

1,643

 

 

$

1,972

 

Weighted-average remaining lease term (in years)

 

 

 

 

5.23

 

 

 

5.14

 

Weighted-average discount rate

 

 

 

 

4.31

%

 

 

4.08

%

 

 

The following table provides supplemental lease information for the consolidated statements of cash flows for the years ended December 31, 2025 and 2024:

 

 

 

Year Ended

 

 

 

December 31,
2025

 

 

December 31,
2024

 

 

 

(Dollars in Thousands)

 

Cash paid for amounts included in the measurement of
   lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

412

 

 

$

395

 

 

 

The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of December 31, 2025:

 

 

 

Minimum
Rental Payments

 

 

 

(Dollars in
Thousands)

 

2026

 

 

419

 

2027

 

 

308

 

2028

 

 

269

 

2029

 

 

183

 

2030 and thereafter

 

 

746

 

Total future minimum lease payments

 

$

1,925

 

Less: Imputed interest

 

 

282

 

Total

 

$

1,643

 

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 14, 2025
2023Mar 14, 2024
2022Mar 10, 2023
2021Mar 14, 2022
2020Mar 15, 2021
2019Mar 18, 2020
2018Mar 15, 2019
2017Mar 15, 2018
2016Mar 15, 2017
2015Mar 11, 2016

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.