Leases

3 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Leases

As Lessee - Operating Leases

Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At September 30, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.

The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.

Supplemental Balance Sheet Information:	September 30, 2020			June 30, 2020
ROU assets	$	4,827		$	4,601
Lease liabilities	4,824			4,590
Weighted-average remaining lease terms	4.79			5.02
Weighted-average discount rate	2.81		%	2.97		%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	987
2022	1,248
2023	1,200
2024	735
2025	349
Thereafter	676
Total of future minimum payments	$	5,195

The following table presents components of operating lease expense for the three months ended September 30, 2020 and 2019:

	2020		2019
Operating lease cost (included in occupancy expense)	$	439	$	473
Sublease income (included in other, net noninterest income)	(61)		(64)
Total operating lease expense, net	378		409

As Lessee - Finance Lease

The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at September 30, 2020 and June 30, 2020 and is included in other assets. The corresponding lease liability totaled $1,833 and $1,843 at September 30, 2020 and June 30, 2020, respectively, and is included in other liabilities. For the three months ended September 30, 2020 and 2019, interest expense on the lease liability totaled $24 and $24, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.

The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	100
2022	134
2023	134
2024	145
2025	146
Thereafter	1,848
Total minimum lease payments	2,507
Less: amount representing interest	(674)
Present value of net minimum lease payments	$	1,833

Supplemental lease cash flow information for the three months ended September 30, 2020 and 2019:

	2020		2019
ROU assets - noncash additions (operating leases)	$	533	$	5,296
ROU assets - noncash addition (finance lease)	—		2,052
Cash paid for amounts included in the measurement of lease liabilities (operating leases)	524		558
Cash paid for amounts included in the measurement of lease liabilities (finance leases)	33		33

As Lessor - General

The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.

As Lessor - Operating Leases

Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $22,540 and $21,595 with a residual value of $10,971 and $12,370 as of September 30, 2020 and June 30, 2020, respectively. For the three months ended September 30, 2020 and 2019, total equipment finance operating lease income totaled $1,325 and $568, respectively. For the three months ended September 30, 2020 and 2019, depreciation expense totaled $1,541 and $350, respectively.

The following schedule summarizes aggregate future minimum operating lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	5,295
2022	4,002
2023	2,366
2024	709
2025	180
Thereafter	13
Total of future minimum payments	$	12,565

As Lessor - Finance Leases

Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three months ended September 30, 2020 and 2019, total interest income on equipment finance leases totaled $530 and $319, respectively.

The following table presents components of finance lease net investment included within equipment finance class of financing receivables:

	September 30, 2020		June 30, 2020
Lease receivables	$	48,358	$	44,927

The following schedule summarizes aggregate future minimum finance lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	9,457
2022	12,324
2023	12,084
2024	10,385
2025	7,195
Thereafter	1,676
Total minimum payments	53,121
Less: amount representing interest	(4,763)
Total	$	48,358

Leases

Leases

As Lessee - Operating Leases

Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At September 30, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.

The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.

Supplemental Balance Sheet Information:	September 30, 2020			June 30, 2020
ROU assets	$	4,827		$	4,601
Lease liabilities	4,824			4,590
Weighted-average remaining lease terms	4.79			5.02
Weighted-average discount rate	2.81		%	2.97		%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	987
2022	1,248
2023	1,200
2024	735
2025	349
Thereafter	676
Total of future minimum payments	$	5,195

The following table presents components of operating lease expense for the three months ended September 30, 2020 and 2019:

	2020		2019
Operating lease cost (included in occupancy expense)	$	439	$	473
Sublease income (included in other, net noninterest income)	(61)		(64)
Total operating lease expense, net	378		409

As Lessee - Finance Lease

The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at September 30, 2020 and June 30, 2020 and is included in other assets. The corresponding lease liability totaled $1,833 and $1,843 at September 30, 2020 and June 30, 2020, respectively, and is included in other liabilities. For the three months ended September 30, 2020 and 2019, interest expense on the lease liability totaled $24 and $24, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.

The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	100
2022	134
2023	134
2024	145
2025	146
Thereafter	1,848
Total minimum lease payments	2,507
Less: amount representing interest	(674)
Present value of net minimum lease payments	$	1,833

Supplemental lease cash flow information for the three months ended September 30, 2020 and 2019:

	2020		2019
ROU assets - noncash additions (operating leases)	$	533	$	5,296
ROU assets - noncash addition (finance lease)	—		2,052
Cash paid for amounts included in the measurement of lease liabilities (operating leases)	524		558
Cash paid for amounts included in the measurement of lease liabilities (finance leases)	33		33

As Lessor - General

The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.

As Lessor - Operating Leases

Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $22,540 and $21,595 with a residual value of $10,971 and $12,370 as of September 30, 2020 and June 30, 2020, respectively. For the three months ended September 30, 2020 and 2019, total equipment finance operating lease income totaled $1,325 and $568, respectively. For the three months ended September 30, 2020 and 2019, depreciation expense totaled $1,541 and $350, respectively.

The following schedule summarizes aggregate future minimum operating lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	5,295
2022	4,002
2023	2,366
2024	709
2025	180
Thereafter	13
Total of future minimum payments	$	12,565

As Lessor - Finance Leases

Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three months ended September 30, 2020 and 2019, total interest income on equipment finance leases totaled $530 and $319, respectively.

The following table presents components of finance lease net investment included within equipment finance class of financing receivables:

	September 30, 2020		June 30, 2020
Lease receivables	$	48,358	$	44,927

The following schedule summarizes aggregate future minimum finance lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	9,457
2022	12,324
2023	12,084
2024	10,385
2025	7,195
Thereafter	1,676
Total minimum payments	53,121
Less: amount representing interest	(4,763)
Total	$	48,358

Leases

Leases

As Lessee - Operating Leases

Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At September 30, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.

The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.

Supplemental Balance Sheet Information:	September 30, 2020			June 30, 2020
ROU assets	$	4,827		$	4,601
Lease liabilities	4,824			4,590
Weighted-average remaining lease terms	4.79			5.02
Weighted-average discount rate	2.81		%	2.97		%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	987
2022	1,248
2023	1,200
2024	735
2025	349
Thereafter	676
Total of future minimum payments	$	5,195

The following table presents components of operating lease expense for the three months ended September 30, 2020 and 2019:

	2020		2019
Operating lease cost (included in occupancy expense)	$	439	$	473
Sublease income (included in other, net noninterest income)	(61)		(64)
Total operating lease expense, net	378		409

As Lessee - Finance Lease

The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at September 30, 2020 and June 30, 2020 and is included in other assets. The corresponding lease liability totaled $1,833 and $1,843 at September 30, 2020 and June 30, 2020, respectively, and is included in other liabilities. For the three months ended September 30, 2020 and 2019, interest expense on the lease liability totaled $24 and $24, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.

The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	100
2022	134
2023	134
2024	145
2025	146
Thereafter	1,848
Total minimum lease payments	2,507
Less: amount representing interest	(674)
Present value of net minimum lease payments	$	1,833

Supplemental lease cash flow information for the three months ended September 30, 2020 and 2019:

	2020		2019
ROU assets - noncash additions (operating leases)	$	533	$	5,296
ROU assets - noncash addition (finance lease)	—		2,052
Cash paid for amounts included in the measurement of lease liabilities (operating leases)	524		558
Cash paid for amounts included in the measurement of lease liabilities (finance leases)	33		33

As Lessor - General

The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.

As Lessor - Operating Leases

Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $22,540 and $21,595 with a residual value of $10,971 and $12,370 as of September 30, 2020 and June 30, 2020, respectively. For the three months ended September 30, 2020 and 2019, total equipment finance operating lease income totaled $1,325 and $568, respectively. For the three months ended September 30, 2020 and 2019, depreciation expense totaled $1,541 and $350, respectively.

The following schedule summarizes aggregate future minimum operating lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	5,295
2022	4,002
2023	2,366
2024	709
2025	180
Thereafter	13
Total of future minimum payments	$	12,565

As Lessor - Finance Leases

Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three months ended September 30, 2020 and 2019, total interest income on equipment finance leases totaled $530 and $319, respectively.

The following table presents components of finance lease net investment included within equipment finance class of financing receivables:

	September 30, 2020		June 30, 2020
Lease receivables	$	48,358	$	44,927

The following schedule summarizes aggregate future minimum finance lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	9,457
2022	12,324
2023	12,084
2024	10,385
2025	7,195
Thereafter	1,676
Total minimum payments	53,121
Less: amount representing interest	(4,763)
Total	$	48,358

Leases

Leases

As Lessee - Operating Leases

Company operating leases primarily include office space and bank branches. Certain leases include one or more options to renew, with renewal terms that can extend the lease term up to 15 additional years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in estimating the value of the ROU and lease liability. At September 30, 2020, we did not have any leases that had not yet commenced for which we had created a ROU asset and a lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of our lease agreements include periodic rate adjustments for inflation. The depreciable life of ROU assets and leasehold improvements are limited to the shorter of the useful life or the expected lease term. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expenses for these leases over the lease term.

The following table presents supplemental balance sheet information related to operating leases. ROU assets are included in other assets and lease liabilities are included in other liabilities.

Supplemental Balance Sheet Information:	September 30, 2020			June 30, 2020
ROU assets	$	4,827		$	4,601
Lease liabilities	4,824			4,590
Weighted-average remaining lease terms	4.79			5.02
Weighted-average discount rate	2.81		%	2.97		%

The following schedule summarizes aggregate future minimum lease payments under these operating leases at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	987
2022	1,248
2023	1,200
2024	735
2025	349
Thereafter	676
Total of future minimum payments	$	5,195

The following table presents components of operating lease expense for the three months ended September 30, 2020 and 2019:

	2020		2019
Operating lease cost (included in occupancy expense)	$	439	$	473
Sublease income (included in other, net noninterest income)	(61)		(64)
Total operating lease expense, net	378		409

As Lessee - Finance Lease

The Company currently leases land for one of its branch office locations under a finance lease. The ROU asset for the finance lease totaled $2,052 at September 30, 2020 and June 30, 2020 and is included in other assets. The corresponding lease liability totaled $1,833 and $1,843 at September 30, 2020 and June 30, 2020, respectively, and is included in other liabilities. For the three months ended September 30, 2020 and 2019, interest expense on the lease liability totaled $24 and $24, respectively. The finance lease has a maturity date of July 2028 and a discount rate of 5.18%.

The following schedule summarizes aggregate future minimum lease payments under this finance lease obligation at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	100
2022	134
2023	134
2024	145
2025	146
Thereafter	1,848
Total minimum lease payments	2,507
Less: amount representing interest	(674)
Present value of net minimum lease payments	$	1,833

Supplemental lease cash flow information for the three months ended September 30, 2020 and 2019:

	2020		2019
ROU assets - noncash additions (operating leases)	$	533	$	5,296
ROU assets - noncash addition (finance lease)	—		2,052
Cash paid for amounts included in the measurement of lease liabilities (operating leases)	524		558
Cash paid for amounts included in the measurement of lease liabilities (finance leases)	33		33

As Lessor - General

The Company leases equipment to commercial end users under operating and finance lease arrangements. Our equipment finance leases consist mainly of transportation, medical, and agricultural equipment. Many of our operating and finance leases offer the lessee the option to purchase the equipment at fair value or for a nominal fixed purchase option; and most of the leases that do not have a nominal purchase option include renewal provisions resulting in some leases continuing beyond initial contractual terms. Our leases do not include early termination options, and continued rent payments are due if leased equipment is not returned at the end of the lease.

As Lessor - Operating Leases

Operating lease income is recognized as a component of noninterest income on a straight-line basis over the lease term. Lease terms range from 1 to 5 years. Assets related to operating leases are included in other assets and the corresponding depreciation expense is recorded on a straight-line basis as a component of other noninterest expense. The net book value of leased assets totaled $22,540 and $21,595 with a residual value of $10,971 and $12,370 as of September 30, 2020 and June 30, 2020, respectively. For the three months ended September 30, 2020 and 2019, total equipment finance operating lease income totaled $1,325 and $568, respectively. For the three months ended September 30, 2020 and 2019, depreciation expense totaled $1,541 and $350, respectively.

The following schedule summarizes aggregate future minimum operating lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	5,295
2022	4,002
2023	2,366
2024	709
2025	180
Thereafter	13
Total of future minimum payments	$	12,565

As Lessor - Finance Leases

Finance lease income is recognized as a component of loan interest income over the lease term. The finance leases are included as a component of the equipment finance class of financing receivables under the commercial loan segment. For the three months ended September 30, 2020 and 2019, total interest income on equipment finance leases totaled $530 and $319, respectively.

The following table presents components of finance lease net investment included within equipment finance class of financing receivables:

	September 30, 2020		June 30, 2020
Lease receivables	$	48,358	$	44,927

The following schedule summarizes aggregate future minimum finance lease payments to be received at September 30, 2020:

Fiscal year ending June 30:
Remaining 2021	$	9,457
2022	12,324
2023	12,084
2024	10,385
2025	7,195
Thereafter	1,676
Total minimum payments	53,121
Less: amount representing interest	(4,763)
Total	$	48,358