Note 6 - Leases

12 Months Ended

Dec. 31, 2025

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 6 - Leases

The Bank has lease agreements with unaffiliated parties for fifteen locations, comprised of eleven full-service branches, three business centers, and a parking easement. Lease expirations range from one to twenty years, with additional renewal options on certain leases ranging from two to ten years. If the exercise of a renewal option is considered to be reasonably certain, the Company includes the extended term in the calculation of the right-of-use asset and lease liability. At December 31, 2025, the Company's ROU assets and lease liabilities were $15.6 million and $16.4 million, respectively.

Total costs incurred by the Company, as a lessee, were $2.7 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively, and principally related to contractual lease payments on operating leases. The Company's leases do not impose significant covenants or other restrictions on the Company. In the second quarter of 2025, the Bank consolidated its Bellevue and Fremont business centers into a new location. As a result, the ROU asset and lease liability balances decreased $1.9 million for the terminated leases and increased $1.3 million related to the lease for the new Seattle business center. An additional decrease of $185,000 was recorded in the fourth quarter of 2025 related to the announced closure of the Bellevue branch in April 2026.

The following table presents amounts relevant to the Company's assets leased for use in its operations for the years ended:

(dollars in thousands)	December 31, 2025		December 31, 2024
Operating cash flows from operating leases	$	2,704	$	2,256
Right of use assets obtained in exchange for new operating lease liabilities		1,264		12,158

The following table presents the weighted-average remaining lease terms and discount rates of the Company's assets leased for use in its operations at:

	December 31, 2025			December 31, 2024
Weighted-average remaining lease term of operating leases (in years)		12.0			12.4
Weighted-average discount rate of operating leases		7.8	%		7.3	%

All lease agreements require the Bank to pay its pro-rata share of building operating expenses. The minimum annual lease payments under non-cancellable operating leases with initial or remaining terms of one year or more through the initial lease term are as follows:

(dollars in thousands)	December 31, 2025
Twelve-month period ending:
2026	$	2,125
2027		2,197
2028		2,124
2029		2,102
2030		2,143
Thereafter		16,447
Total minimum payments required	$	27,138
Less imputed interest		10,699
Present value of lease liabilities	$	16,439