Texas Community Bancshares, Inc. Leases Disclosure
Note 7 – Leases
The Company leases certain office facilities and equipment for various terms under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2030 and provide for renewal options ranging from 1 year to 5 years. The Company included in the determination of the right-of-use assets and lease liabilities any renewal options when the options are reasonably certain to be exercised. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs.
The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated using the Company’s applicable borrowing rates and the contractual lease term.
Total right-of-use assets and lease liabilities at December 31, 2025 and 2024, were as follows:
December 31, | ||||||||
| Statement of Financial Condition Classification | | 2025 | | 2024 | |||
Right-of-use assets: |
| |
| |
| | ||
Operating leases |
| $ | 578 | $ | 292 | |||
Lease Liabilities: |
| |
| |
| | ||
Operating lease liabilities |
| $ | 577 | $ | 292 | |||
Total lease costs for the years ended December 31, 2025 and 2024, were as follows:
December 31, | ||||||
| 2025 | | 2024 | |||
Operating lease cost | $ | 121 | $ | 72 | ||
The future minimum lease payments under noncancelable operating leases with terms greater than one year at December 31, 2025, were as follows:
| Operating Leases | ||
2026 | $ | 146 | |
2027 |
| 149 | |
2028 |
| 150 | |
2029 |
| 137 | |
2030 |
| 42 | |
Total undiscounted lease payments |
| 624 | |
Less: imputed interest |
| (47) | |
Net lease liabilities | $ | 577 | |
Supplemental Lease Information
| December 31, |
| |||||
| 2025 | | 2024 |
| |||
Weighted-average remaining lease term |
| |
| | |||
Operating leases |
| 4.21 Years |
| 4.48 Years | |||
Weighted-average discount rate |
| |
| | |||
Operating leases |
| 3.63 | % | 2.79 | % | ||
Cash paid for amounts included in the measurement of lease liabilities | |||||||
Operating cash flows from operating leases | $ | 124 | $ | 71 | |||
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.