The Company leases real estate property for branches and office space. At March 31, 2026 and December 31, 2025, all of the Company's leases are classified as operating leases.

The Company determines if an arrangement is a lease at inception. ASC Topic 842 requires lessees to recognize a right-of-use asset and a lease liability, measured at the present value of the future minimum lease payments, at the lease commencement date. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments. At both March 31, 2026 and December 31, 2025, the weighted average remaining lease term for operating leases was 5.5 years, and the weighted average discount rate used in the measurement of operating lease liabilities was 3.50% and 3.39%, respectively.

The Company accounts for the lease and non-lease components separately since such amounts are readily determinable under the Company's lease contracts. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense in the Consolidated Statements of Income. During the three months ended March 31, 2026 and 2025, operating and variable lease expenses totaled approximately $991,000 and $857,000, respectively.

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three months ended March 31, 2026 and 2025. At March 31, 2026, the Company had no leases which had not yet commenced.


	Lease Payment Obligations at
	March 31,		December 31,
	2026		2025
	(In thousands)


One year or less	$	3,680	$	4,658
After one year to two years	4,220		3,850
After two years to three years	3,651		3,283
After three years to four years	2,662		2,296
After four years to five years	1,512		1,149
Thereafter	3,419		2,953
Total undiscounted cash flows	19,144		18,189
Discount on cash flows	(1,817)		(1,666)
Total lease liability	$	17,327	$	16,523