NOTE 7 — Leases

The Company recognizes the present value of its operating lease payments related to its office facilities and retail branches as operating lease assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. These operating lease assets represent the Company’s right to use an underlying asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate, the rate of interest to borrow on a collateralized basis for a similar term, at the lease commencement date in order to determine present value.

Short-term lease payments, those leases with original terms of 12 months or less, are recognized in the Consolidated Statements of Income, on a straight-line basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options is typically at the Company’s discretion and are included in the operating lease liability if it is reasonably certain that the renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not included in the measurement of the lease liability since they are generally able to be segregated. The Company does not sublease any of its leased properties. The Company does not lease properties from any related parties.

As of March 31, 2026, right of use (“ROU”) lease assets and related lease liabilities were $1.9 million and $2.4 million, respectively. As of December 31, 2025, ROU lease assets and related lease liabilities were $2.1 million and $2.6 million, respectively. ROU assets are included within Other assets and related lease liabilities are included within Accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

As of March 31, 2026, the Company was obligated under several non-cancelable leases for certain premises and equipment. The minimum annual rental commitments, exclusive of taxes and other charges, under non-cancelable lease agreements for premises at March 31, 2026, are summarized as follows:

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In addition to the table above, as of March 31, 2026, the Company had an additional future operating lease commitment for its future corporate headquarters of approximately $24.4 million that has been executed but not yet commenced. This operating lease is expected to commence no earlier than the fourth quarter of 2026 with a lease term of 12.25 years.

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The components of total lease cost are as follows:

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