COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2026

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 8 — COMMITMENTS AND CONTINGENCIES

In the normal course of business, there are various pending legal actions and proceedings that are not reflected in the consolidated financial statements. Management does not believe the outcome of these actions and proceedings will have a material effect on the consolidated financial position or results of operations of the Company.

The Company currently leases two branch banking facilities and one parcel of land under operating leases. At March 31, 2026, right-of-use assets and lease liabilities were recorded related to these operating leases totaling $1,332,000 and $1,871,000, respectively. At December 31, 2025, right-of-use assets and lease liabilities stood at $1,326,000 and $1,862,000, respectively, in the consolidated balance sheets.

The Company recognized total operating lease costs for the three months ended March 31, 2026 and 2025 of $52,000 and $48,000, respectively. Operating lease costs are included in occupancy, net in the accompanying statements of income. Cash payments totaled $48,000 and $44,000, respectively, for the three months ended March 31, 2026 and 2025.

The Company currently has one finance lease for equipment. At March 31, 2026, right-of-use assets and lease liabilities were recorded related to the finance lease totaling $44,000 and $31,000, respectively. At December 31, 2025, right-of-use assets and lease liabilities were recorded related to the finance lease totaling $29,000 and $33,000. Amounts

recognized as right-of-use assets and lease liabilities related to finance leases are included in premises and equipment, net and other liabilities, respectively, in the accompanying consolidated balance sheets.

Total finance lease costs that were recognized by the Company for the three months ended March 31, 2026 and 2025 were immaterial. Cash payments totaled $2,000 and $0 for the three months ended March 31, 2026 and 2025, respectively.

Options to extend or terminate a lease may be included in the Company’s lease agreements. When it is reasonably certain that the Company will exercise those options, the right-of-use asset and lease liability will reflect the renewal or termination option. No significant assumptions or judgements were made in determining whether a contract contained a lease or in the consideration of lease versus non-lease components. None of the leases contained an implicit rate; therefore, the Company’s incremental borrowing rate was used for each of the leases.

The following table displays the weighted-average term and discount rates for operating and finance leases outstanding as of March 31, 2026 and December 31, 2025.

	March 31,	December 31,	March 31,	December 31,
	2026	2025	2026	2025
	Operating	Operating	Finance	Finance
Weighted-average term (years)	18.03	18.17	4.00	4.25
Weighted-average discount rate	4.16%	4.16%	4.31%	4.31%

A maturity analysis of operating and finance lease liabilities and reconciliation of the undiscounted cash flows to the total operating or finance lease liability is as follows:

(Dollars in thousands)
	March 31,		December 31,		March 31,		December 31,
		2026		2025		2026		2025
Minimum Lease Payments due:	Operating		Operating		Finance		Finance
Within one year	$	170	$	175	$	8	$	8
After one but within two years		155		154		9		9
After two but within three years		157		157		8		8
After three but within four years		157		157		9		9
After four but within five years		157		157		—		2
After five years		1,963		2,003		—		—
Total undiscounted cash flows		2,759		2,803		34		36
Discount on cash flows		(888)		(941)		(3)		(3)
Total lease liability	$	1,871	$	1,862	$	31	$	33