The Company has leases pertaining to bank premises and vehicles with remaining lease terms of 4 to 14 years, some of which include renewal or termination options to extend the lease. Most of the Company’s leases are classified as operating leases. Lease expense for the operating leases is recognized on a straight-line basis over the lease term. Right-of-use ("ROU") assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The following table represents the classification of the Company’s ROU assets and lease liabilities on the consolidated balance sheets:


(In thousands)		December 31, 2025		December 31, 2024
Lease right-of-use assets:
Operating leases	Premises and equipment, net	$	5,163	$	6,074
Finance leases	Premises and equipment, net		445		—
Total lease right-of-use assets		$	5,608	$	6,074

Lease liabilities:
Operating leases	Accrued expenses and other liabilities	$	5,297	$	6,119
Finance leases	Accrued expenses and other liabilities		397		—
Total lease liabilities		$	5,694	$	6,119

The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company’s incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term and other factors. The following table presents the weighted average remaining lease term and the weighted average discount rate:


	December 31, 2025			December 31, 2024
Weighted-average remaining lease term (in years)
Operating leases		10.01			10.66
Finance leases		7.58			-

Weighted-average discount rate
Operating leases liabilities		6.47	%		6.33	%
Finance lease liabilities		4.00	%		0.00	%

The following table presents the components of lease expense for operating leases:


	Year Ended December 31,
(In thousands)	2025		2024
Operating lease expense:
Operating lease cost	$	798	$	836
Variable lease cost		26		19
Total lease cost, net	$	824	$	855

The following table presents the components of lease expense for finance leases:


	Year Ended December 31,
(In thousands)	2025		2024
Finance lease expense:
Amortization of right-of-use asset	$	21	$	—
Interest on lease liabilities		17		—
Total lease cost, net	$	38	$	—

Supplemental cash flow information related to leases was as follows:


	Year Ended December 31,
(In thousands)	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	741	$	793
Operating cash flows from finance leases		37		—
Financing cash flows from finance leases		17		—

Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2025 are as follows:


(In thousands)	Operating Leases		Finance Leases
2026	$	752	$	55
2027		765		57
2028		778		59
2029		765		60
2030		673		62
Thereafter		3,363		169
Total undiscounted lease payments	$	7,096	$	462
Less: imputed interest		1,799		65
Net lease liabilities	$	5,297	$	397

The Company has entered into employment agreements with certain executives. The agreements generally provide for specified minimum levels of annual compensation and benefits for a certain period of time. In addition, the agreements provide for specified lump sum payments and the continuation of benefits upon certain events of termination, as defined in the agreements.

The Company is involved in various legal proceedings arising in the normal course of business, none of which is believed by management to have merit. Based on the advice of legal counsel, management believes that these matters are not material to the consolidated financial condition or results of operations of the Company.

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the accompanying consolidated balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Off-balance-sheet financial instruments whose contract amounts represent credit risk include the following:


(In thousands)	December 31, 2025		December 31, 2024
Unadvanced lines of credit	$	258,739	$	314,578
Unadvanced construction loans		27,799		32,613
Residential mortgage loan commitments		3,976		8,090
Commercial and mortgage loan commitments		51,947		50,845
Standby letters of credit		4,726		4,542
Total	$	347,187	$	410,668

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of the credit is based on management’s credit evaluation of the customer.

Collateral held varies but may include residential real estate, inventory, property, plant and equipment, and income-producing commercial real estate.

Letters-of-credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Substantially all letters-of-credit have expiration dates within one year. The credit risk involved in issuing letters-of-credit is essentially the same as that involved in extending loan facilities to customers. The Company fully collateralized those commitments for which collateral is deemed necessary.