NOTE 12 LEASING ACTIVITIES

As of June 30, 2026, the Bank leases four branch offices, one administrative office, one loan production office and sublets a lot adjacent to another branch office. The lease agreements have maturity dates ranging from 2028 to December 2041. It is assumed that there are currently no circumstances in which the leases would be terminated prior to expiration. The weighted average remaining life of the lease terms as of June 30, 2026 was 5.85 years.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to the lease term for each transaction. This methodology is expected to be used for any other subsequent lease agreements. The weighted average discount rate for the leases as of June 30, 2026 was 3.34%.

For the three and six months ended June 30, 2026 and 2025, operating lease expenses were $148,000 and $295,000; and $145,000 and $288,000, respectively.

The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. As of June 30, 2026, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands):