Leases

3 Months Ended

Sep. 30, 2023

Leases

Leases

Note 15 – Leases

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Substantially all of the leases in which the Company is the lessee include real estate property for branches and office space with terms extending through 2043. Topic 842 requires the Company to recognize a right-of-use (“ROU”) asset and corresponding lease liability for each of its operating leases. The operating lease ROU asset was $8.8 million and $8.9 million as of September 30, 2023 and June 30, 2023, respectively, and the operating lease liability was $9.0 million and $9.1 million as of September 30, 2023 and June 30, 2023, respectively. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months of less), or equipment leases (deemed immaterial) on the Consolidated Statements of Financial Condition.

The calculated amount of the ROU assets and lease liabilities 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, Topic 842

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, on a collateralized basis, over a similar term.

	September 30,
	2023
Weighted average remaining lease term
Operating leases	16.2	years
Weighted average discount rate
Operating leases	2.90	%

	June 30,
	2023
Weighted average remaining lease term
Operating leases	16.4	years
Weighted average discount rate
Operating leases	2.89	%

The Company recorded $223 thousand and $162 thousand of net lease costs during the three months ended September 30, 2023 and 2022, respectively. Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2023 were as follows:

	September 30,
	2023
	Operating
(in thousands)	Leases
Twelve months ended September 30,
2024	$	814
2025		775
2026		624
2027		640
2028		651
Thereafter		7,873
Total future minimum lease payments	$	11,377
Amounts representing interest		(2,405)
Present value of net future minimum lease payments	$	8,972