Hanover Bancorp, Inc. /MD Leases Disclosure
Note 5. Leases
Operating Leases
The Company enters into leases in the normal course of business primarily for branch locations, back-office operations locations, business development offices, and equipment. The Company’s leases have remaining terms ranging from 2 to 11 years, some of which include renewal or termination options to extend the lease for up to 5 years and some include options to terminate the lease upon notification. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. The Company has no leases that are subject to sublease agreements.
As of December 31, 2025 and 2024, the Company had lease liabilities totaling $10.6 million and $9.0 million, respectively, and right-of-use assets totaling $9.9 million and $8.3 million. As of December 31, 2025, the weighted average remaining lease term was 8 years and the weighted average discount rate was 4.5%. Total lease costs for the year ended December 31, 2025 and 2024 were $2.5 million and $2.2 million, respectively.
Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2025 are as follows:
(dollars in thousands) |
| ||
Years Ending December 31, | |||
2026 | $ | 2,570 | |
2027 |
| 1,999 | |
2028 |
| 1,635 | |
2029 |
| 1,290 | |
2030 |
| 1,309 | |
Thereafter |
| 3,326 | |
Total undiscounted lease payments | 12,129 | ||
Less: imputed interest | 1,562 | ||
Net lease liability | $ | 10,567 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
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.