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Premises and Equipment

3 Months Ended

Sep. 30, 2025

Premises and Equipment

Premises and Equipment

Note 5: Premises and Equipment

Following is a summary of premises and equipment:



(dollars in thousands)		September 30, 2025			June 30, 2025
Land		$	15,401		$	15,386
Buildings and improvements			88,989			85,512
Construction in progress			44			2,754
Furniture, fixtures, equipment and software			29,505			29,386
Automobiles			118			118
Operating leases ROU asset			6,961			6,991
			141,018			140,147
Less accumulated depreciation			45,807			44,165
		$	95,211		$	95,982

Leases. The Company elected certain relief options under ASU 2016-02, Leases (Topic 842), including the option not to recognize ROU asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). At September 30, 2025, the Company had ten leased properties, which included banking facilities, administrative offices and ground leases, and numerous office equipment lease agreements in which it was 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 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 was 4.0% to 5.7%. The expected lease terms range from 18 months to 20 years.


		September 30, 2025			June 30, 2025
Consolidated Balance Sheet
Operating leases ROU asset		$	6,961		$	6,991
Operating leases liability		$	6,961		$	6,991


		For the three- month
		periods ended
		September 30,
(dollars in thousands)		2025			2024
Consolidated Statement of Income
Operating lease costs classified as occupancy and equipment expense		$	298		$	298
(includes short-term lease costs)

Supplemental disclosures of cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	217		$	206
ROU assets obtained in exchange for operating lease obligations:		$	52		$	—

At September 30, 2025, future expected lease payments for leases with terms exceeding one year were as follows:


(dollars in thousands)
2026		$	692
2027			853
2028			867
2029			850
2030			834
Thereafter			7,669
Future lease payments expected			11,765
Less: present value discount			(4,804)
Total lease liability		$	6,961

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 three-month periods ended September 30, 2025, and 2024, income recognized from these lessor agreements was $130,000 and $114,000, respectively.