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LEASES

3 Months Ended

Dec. 31, 2022

NOTE H – LEASES

The Company accounts for its leases in accordance with ASU 2016-02, Leases (Topic 842). Topic 842 requires lessees to recognize a lease liability and a right-of-use (“ROU”) asset, measured at the present value of the future minimum lease payments, at the lease commencement date.

The Company holds operating leases for five branch locations. Our leases have remaining lease terms of up to nine years, some of which include options to extend the leases for up to 10 additional years. Operating leases are recorded as ROU assets and lease liabilities and are included within Other assets and Accounts payable and other liabilities, respectively, on our Consolidated Balance Sheets.

Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement base on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate. The incremental borrowing rate used by the Company to value its operating leases is based on the interpolated term advance rate available from the Federal Home Loan Bank of New York, based on the remaining lease term.

At December 31, 2022, the Company’s operating lease ROU assets and operating lease liabilities totaled $3.1 million and $3.4 million, respectively.

The following table presents the balance sheet information related to our leases:

	December 31,		September 30,
	2022		2022
	(Dollars in thousands)

Operating lease right-of-use asset	$	3,141	$	3,292
Operating lease liabilities	$	3,440	$	3,605
Weighted average remaining lease term in years		6.8		7.0
Weighted average discount rate		2.2%		2.2%

The following table summarizes the maturity of our remaining lease liabilities by year (in thousands):

	December 31, 2022
	(In thousands)
For the Year Ending:
2023	$	554
2024		747
2025		523
2026		455
2027		334
2028 and thereafter		1,199
Total lease payments		3,812
Less imputed interest		(372	)
Present value of lease liabilities	$	3,440

Total leases expense recorded on the Consolidated Statements of Income within Occupancy expense were $196,000 and $207,000 for the three months ended December 31, 2022 and 2021, respectively.