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Lease Commitments

12 Months Ended

Dec. 31, 2025

Note 6 – Lease Commitments

The Company is the lessee under 13 building and land lease agreements for branch locations across Massachusetts and southern New Hampshire, as well as a warehouse lending office in Ponte Vedra Beach, Florida and an administrative office in Wellesley, Massachusetts. The Company’s operating leases have remaining lease terms of 10 to 25 years, some of which include options to extend the leases for up to 10 years. In addition to the rental amounts, the Company is responsible for its share of utilities.

The Company acquired four building lease agreements with the Provident acquisition including branches in Amesbury, Seabrook and Portsmouth, New Hampshire and Ponte Vedra Beach, Florida. The Company acquired right-of-use assets of $5.4 million, net of a $1.7 million fair value mark and lease liabilities of $5.9 million, net of a $2.1 million fair value mark related to the assumed leases. The fair value marks were calculated using incremental borrowing rates at the date of acquisition on the right-of-use asset and lease liabilities for the remainder of the lease term, in comparison to the right-of-use and lease liabilities on Provident’s consolidated balance sheet at the date of acquisition.

The Company follows ASC 842, “Leases”, whereby all of its existing branch lease agreements have been recognized in the consolidated balance sheets in prepaid expenses and other assets as “right of use assets”, with offsetting “operating lease liabilities” in accrued expenses and other liabilities.

The following is a summary of the recorded lease right-of-use assets for all of the above-mentioned lease agreements as of the dates stated:


	December 31, 2025			December 31, 2024

	(in thousands)
Operating lease right-of-use assets	$	19,672		$	14,278
Acquisition of Provident leases		3,738			—
Accumulated amortization		(3,453)			(1,453)
Operating lease right-of-use assets, net		19,957			12,825
Operating lease liabilities	$	21,737		$	13,195
Weighted average remaining term (years)		14			17
Weighted average discount rate		4.45%			4.45%

The future minimum lease payments under the terms of the above leases at December 31, 2025, along with the recorded present value of the lease obligations, are as follows:


(in thousands)
2026	$	1,590
2027		1,723
2028		2,304
2029		2,332
2030		2,392
2031 and thereafter		19,657
	$	29,998
Less unamortized discount		(8,261)
Recorded present value of lease obligations	$	21,737

The Company has included in its recorded lease obligations and right-of-use assets any of the available lease extension options permitted under the agreements that management can be reasonably certain under lease accounting criteria that the options will be exercised.

Required payments for real estate taxes, insurance, utilities and management fees are not included in the recorded lease obligations and assets since they are variable payments that do not depend on a specified index or rate and they are recorded to expense as they are incurred. Any increases in lease payments as a result of changes in the CPI are charged to lease expense.

Common area maintenance charges under the agreements are not considered in the lease payments since they represent a service provided to the Company and, as such, they are recorded to expense as incurred. The discount rates used on the calculation of lease obligations range from 3.01% to 5.29%, which represented the Company’s incremental borrowing rates for similar length terms as the applicable leases at execution.

Total lease expense for the year ended December 31, 2025, 2024 and 2023 approximated $1.5 million, $1.2 and $938,000, respectively.