The Company has committed to rent premises and equipment used in business operations under non-cancelable operating and finance leases and determines if an arrangement meets the definition of a lease upon inception.

Operating and finance lease right-of-use (“ROU”) assets represent a right to use an underlying asset for the contractual lease term. Lease liabilities represent an obligation to make lease payments arising from the lease. A lease ROU asset and lease liability will be recognized for any new leases at the commencement of the new lease.

The Company’s leases do not provide an implicit interest rate, therefore the Company used its incremental collateralized borrowing rates commensurate with the underlying lease terms to determine the present value of operating and finance lease liabilities. The weighted average discount rate as of March 31, 2026 was 4.00% for operating leases and 4.75% for finance leases and is based off the discount rate at the time the lease is originated or renewed.

The Company’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Company’s lease agreements do not contain any residual value guarantees.

Leases with terms of 12 months or less are not included in ROU assets and lease liabilities recorded in the Company’s consolidated balance sheet. Operating lease terms include options to extend when it is reasonably certain that the Company will exercise such options, determined on a lease-by-lease basis. At March 31, 2026, lease expiration dates ranged from 1 year to 19 years, with additional renewal options on certain leases typically ranging from 12 months to 10 years. At March 31, 2026, the weighted average remaining lease term inclusive of renewal options that the Company is reasonably certain to renew for the Company’s operating leases was 7.2 years. The weighted average remaining lease term for the Company's finance lease was six months. The Company had zero operating leases that had not yet commenced as of March 31, 2026.

Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $350,000 for the three months ended March 31, 2026 and $291,000 for the three months ended March 31, 2025. Variable lease components, such as inflation adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Amortization expense for finance leases is recognized on a straight-line basis over the lease term and amounted to $9,000 for each of the three months ended March 31, 2026 and 2025. Interest on finance leases was $1,000 for each of the three months ended March 31, 2026 and 2025.

The following table presents the minimum annual lease payments under the terms of these leases, inclusive of renewal options that the Company is reasonably certain to renew, at March 31, 2026:


	Operating		Finance
(dollars in thousands; unaudited)	March 31, 2026		March 31, 2026

April 1 to December 31, 2026	$	945	$	18
2027	1,136		—
2028	716		—
2029	459		—
2030	413		—
2031 and thereafter	1,869		—
Total lease payments	5,538		18
Less: amounts representing interest	756		—
Present value of lease liabilities	$	4,782	$	18

The following table presents the components of total lease expense, including finance lease costs and operating cash flows for the three months ended March 31, 2026 and 2025:


	Three Months Ended
	March 31, 2026		March 31, 2025
	(dollars in thousands; unaudited)
Lease expense:
Operating lease expense (1)	$	310	$	251
Variable lease expense	109		99
Finance lease cost
Right-of-use amortization (2)	9		9
Interest expense (3)	—		1
Total lease expense	$	428	$	360
Cash paid:
Cash paid from operating leases	$	423	$	354
Cash paid from finance leases	$	9	$	9