The Company has a finance lease for the shell of the building constructed as the Company’s operations center which expires in November 2039. The Company is also obligated under various noncancelable operating lease agreements for land, buildings and equipment that require future minimum rental payments. For each operating lease with an initial term of more than 12 months, the Company records an operating lease ROU asset (representing the right to use the underlying asset for the lease term) and an operating lease liability (representing the obligation to make lease payments required under the terms of the lease). ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate – derived from information available at the lease commencement date – as the discount rate when determining the present value of lease payments. The Company does not have any operating leases with an initial term of 12 months or less. Certain operating leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Certain operating leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. Lease extensions are not reasonably certain and the Company generally does not include payments occurring during option periods in the calculation of its operating lease ROU assets and operating lease liabilities.

The table below presents the ROU assets and lease liabilities recorded in the consolidated balance sheet at the dates indicated (dollars in thousands):


	March 31,			March 31,			Classification in the
Leases	2025			2024			consolidated balance sheets
Finance lease ROU assets	$	1,125		$	1,202		Financing lease ROU assets
Finance lease liability	$	2,099		$	2,168		Finance lease liability
Finance lease remaining lease term		14.68	years		15.68	years
Finance lease discount rate		7.16	%		7.16	%

Operating lease ROU assets	$	4,245		$	5,479		Prepaid expenses and other assets
Operating lease liabilities	$	4,465		$	5,780		Accrued expenses and other liabilities
Operating lease weighted-average remaining lease term		4.65	years		5.34	years
Operating lease weighted-average discount rate		1.67	%		1.74	%

The table below presents certain information related to the lease costs for operating leases, which are recorded in occupancy and depreciation in the accompanying consolidated statements of income at the dates indicated (in thousands):


	Year ended		Year ended		Year ended
Lease Costs	March 31, 2025		March 31, 2024		March 31, 2023
Finance lease amortization of ROU asset	$	77	$	76	$	77
Finance lease interest on lease liability		153		158		162
Operating lease costs		1,133		1,133		1,133
Variable lease costs		105		209		209
Total lease cost ⁽¹⁾	$	1,468	$	1,576	$	1,581

⁽¹⁾Income related to sub-lease activity is not significant and not presented herein.

Supplemental cash flow information – Operating cash flows paid for operating lease amounts included in the measurement of lease liabilities was $1.3 million, $1.4 million and $1.4 million for the years ended March 31, 2025, 2024 and 2023, respectively. During the years ended March 31, 2025, 2024 and 2023, the Company did not record any ROU assets that were exchanged for operating lease liabilities.

The following table reconciles the undiscounted cash flows for the periods presented related to the Company’s lease liabilities as of March 31, 2025 (in thousands):


Fiscal Year Ending March 31:	Operating		Finance
	Leases		Lease
2026	$	1,125	$	226
2027		1,116		230
2028		899		232
2029		684		232
2030		693		232
Thereafter		254		2,248
Total minimum lease payments		4,771		3,400
Less: amount of lease payments representing interest		(306)		(1,301)
Lease liabilities	$	4,465	$	2,099