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LEASES

6 Months Ended

Dec. 31, 2022

13.LEASES

The Company leases certain branches under various non-cancelable operating leases that may contain extension options. Reasonably certain extension options are included in the determination of lease term for accounting purposes. The Company has also entered into a long-term ground lease with a bargain purchase option and into office equipment leases which have been classified as finance leases. The leases may require additional payments for maintenance, taxes, insurance, service, and other costs which are not included in calculating the lease liability.

For all asset classes the Company made an accounting policy election to not separate lease components and non-lease components and treat both as a single lease component for lease accounting purposes. The ROU assets and lease liabilities are based on the stated lease consideration as identified in the underlying agreements.

When known or determinable, the Company uses the rate implicit in the lease in determining the present value of lease payments. Otherwise, the incremental borrowing rate is used which is based on information provided by FHLBNY for a secured borrowing arrangement of a comparable term.

The Company made an accounting policy election to not apply the lease accounting requirements to short-term lease arrangements with an initial term of 12 months or less.

The ROU assets are included in premises and equipment and lease liabilities are included in other liabilities in the Company’s consolidated statements of condition.

The following tables include quantitative data related to the Company’s operating and finance leases:


		As of December 31, 2022
	(In thousands, except weighted-average information)
Right of use assets:
Finance leases		$	657
Operating leases			5,640
		$	6,297
Lease liabilities:
Finance leases		$	776
Operating leases			5,896
		$	6,672

Other information:
Weighted-average remaining lease term for finance leases (in years)			61.9
Weighted-average remaining lease term for operating leases (in years)			14.6
Weighted-average discount rate for finance leases			5.54	%
Weighted-average discount rate for operating leases			3.86	%


		For the Three Months Ended		For the Six Months Ended
		December 31, 2022		December 31, 2022

	(In thousands)
Lease expense:
Finance lease expense
Amortization of ROU assets		$	25	$	50
Interest on lease liabilities			8		16
Operating lease expense			151		302
Variable lease expense			50		100
Total:		$	234	$	468

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Finance cash flows from finance leases (i.e. principal portion)		$	25	$	50
Operating cash flows from operating leases		$	146	$	291

Maturities of finance and operating lease liabilities are as follows:


	Finance leases		Operating leases

	(Dollars in thousands)
Within the twelve months ended December 31,
2023	$	131	$	588
2024		131		593
2025		92		572
2026		30		542
2027		30		536
Thereafter		2,610		4,984
Total undiscounted cash flows		3,024		7,815
Less: present value discount		(2,248)		(1,919)
Total lease liabilities	$	776	$	5,896