NOTE 4: Premises and Equipment

Following is a summary of premises and equipment:

​

​

Leases. The Company elected certain relief options under ASU 2016-02, Leases (Topic 842), including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). At June 30, 2026, the Company had ten leased properties, which included banking facilities, administrative offices and ground leases, and numerous office equipment lease agreements in which it is the lessee, with lease terms exceeding twelve months.

All of the Company’s leases are classified as operating leases. These operating leases are included as a ROU asset in the premises and equipment, net line item on the Company’s consolidated balance sheets. The corresponding lease liability is included in the accounts payable and other liabilities line item on the Company’s consolidated balance sheets.

ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. ROU assets or lease liabilities are not to be recognized for short-term leases. The calculated amount of the ROU assets and lease liabilities in the table below are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The range of discount rates utilized at June 30, 2026, was 3.5% to 5.7%, and the expected lease terms ranged from 18 months to 21.6 years. At June 30, 2026, the weighted-average lease term was 15.0 years and the weighted-average discount rate was 4.75%. At June 30, 2025, the weighted-average lease term was 16.1 years and the weighted-average discount rate was 4.76%.

​

​

​

​

At June 30, 2026, future expected lease payments for leases with terms exceeding one year were as follows:

​

​

​

​

​

​

The Company leases facilities it owns or portions of facilities it owns to other third parties. The Company has determined that all of these lease agreements, in terms of being the lessor, are classified as operating leases. For the years ended June 30, 2026 and 2025, income recognized from these lessor agreements was $541,000 and $432,000, respectively. Income from lessor agreements was included in net occupancy and equipment, net expense.