LEASES

12 Months Ended

Dec. 31, 2025

18. LEASES

The Company leases certain branches under various non-cancelable operating leases that may contain extension options. Reasonably certain extension options are included in the determination of lease term for accounting purposes. The Company has also entered into a long-term ground lease with a bargain purchase option and into office equipment leases which have been classified as finance leases. The leases may require additional payments for maintenance, taxes, insurance, service, and other costs which are not included in calculating the lease liability.

For all asset classes the Company made an accounting policy election to not separate lease components and non-lease components and treat both as a single lease component for lease accounting purposes. The ROU assets and lease liabilities are based on the stated lease consideration as identified in the underlying agreements.

When known or determinable, the Company uses the rate implicit in the lease in determining the present value of lease payments. Otherwise, the incremental borrowing rate is used which is based on information provided by FHLBNY for a secured borrowing arrangement of a comparable term.

The Company made an accounting policy election to not apply the lease accounting requirements to short-term lease arrangements with an initial term of 12 months or less.

The ROU assets are included in premises and equipment and lease liabilities are included in other liabilities in the Company’s consolidated statements of condition.

The following tables include quantitative data related to the Company’s operating and finance leases:


	December 31,
	2025			2024

	(In thousands, except weighted-average information)
Right of use assets:
Finance leases	$	420		$	480
Operating leases		3,620			4,352
	$	4,040		$	4,832
Lease liabilities:
Finance leases	$	530		$	596
Operating leases		3,891			4,640
	$	4,421		$	5,236

Other information:
Weighted-average remaining lease term for finance leases (in years)		86.4			77.8
Weighted-average remaining lease term for operating leases (in years)		12.8			13.2
Weighted-average discount rate for finance leases		5.99	%		5.87	%
Weighted-average discount rate for operating leases		4.26	%		3.96	%


		For the Year Ended		For the Six Months Ended					For the Fiscal Year Ended
		December 31,		December 31,					June 30,
		2025		2024		2023			2024

		(Dollars in thousands)
Lease expense:
Finance lease expense
Amortization of ROU assets		$	82	$	52	$	49		$	101
Interest on lease liabilities			32		16		16			32
Operating lease expense			597		325		321			647
Variable lease expense			648		118		119			241
Total		$	1,359	$	511	$	505		$	1,021

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases (i.e. interest)		$	32	$	1	$	1		$	32
Finance cash flows from finance leases (i.e. principal portion)		$	88	$	53	$	50		$	102
Operating cash flows from operating leases		$	603	$	319	$	309		$	627
ROU assets obtained in exchange for new finance lease liabilities		$	—	$	—	$	—		$	26
ROU assets obtained in exchange for new operating lease liabilities		$	88	$	—	$	199		$	199

During the year ended December 31, 2025 the Company modified operating leases due to a change in the lease term. The modifications resulted in a decrease in the ROU asset and operating lease liability of $355,000 during the year ended December 31, 2025.

During the six months ended December 31, 2024 the Company modified an operating lease due to a change in the lease term. The modification resulted in a decrease in the ROU asset and operating lease liability of $792,000 during the six months ended December 31, 2024.

Maturities of finance and operating lease liabilities are as follows:


	Finance leases		Operating leases

	(Dollars in thousands)
Within the twelve months ended December 31,
2026	$	36	$	569
2027		36		484
2028		36		421
2029		30		341
2030		30		346
Thereafter		2,520		2,913
Total undiscounted cash flows		2,688		5,074
Less: present value discount		(2,158)		(1,183)
Total lease liabilities	$	530	$	3,891