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LEASES

3 Months Ended

Sep. 30, 2023

12.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 right-of-use (“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 September 30, 2023		As of June 30, 2023

	(In thousands, except weighted-average information)
Right of use assets:
Finance leases	$	583	$	608
Operating leases		5,547		5,448
	$	6,130	$	6,056
Lease liabilities:
Finance leases	$	693	$	711
Operating leases		5,817		5,713
	$	6,510	$	6,424

Other information:
Weighted-average remaining lease term for finance leases (in years)		67.2		64.9
Weighted-average remaining lease term for operating leases (in years)		13.8		14.2
Weighted-average discount rate for finance leases		5.66		5.62
Weighted-average discount rate for operating leases		3.90		3.87


	For the Three Months Ended September 30,
	2023		2022

	(Dollars in thousands)
Lease expense:
Finance lease expense
Amortization of ROU assets	$	25	$	25
Interest on lease liabilities		8		8
Operating lease expense		159		151
Variable lease expense		51		50
Total:	$	243	$	234

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Finance cash flows from finance leases (i.e. principal portion)	$	25	$	25
Operating cash flows from operating leases	$	151	$	145

Maturities of finance and operating lease liabilities are as follows:


	Finance leases		Operating leases

	(Dollars in thousands)
Within the twelve months ended September 30,
2024	$	131	$	636
2025		117		628
2026		30		593
2027		30		578
2028		30		573
Thereafter		2,580		4,587
Total undiscounted cash flows		2,918		7,595
Less: present value discount		(2,225)		(1,778)
Total lease liabilities	$	693	$	5,817