Premises and Equipment

12 Months Ended

Jun. 30, 2025

Premises and Equipment

Premises and Equipment

NOTE 4: Premises and Equipment

Following is a summary of premises and equipment:

	June 30,
(dollars in thousands)	2025		2024
Land	$	15,386	$	15,376
Buildings and improvements		85,512		84,474
Construction in progress		2,754		829
Furniture, fixtures, equipment and software		29,386		27,850
Automobiles		118		112
Operating leases ROU asset		6,991		6,669
		140,147		135,310
Less accumulated depreciation		44,165		39,358
	$	95,982	$	95,952

Leases. The Company elected certain relief options under ASU 2016-02, Leases (Topic 842), including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). At June 30, 2025, the Company had ten leased properties, which included banking facilities, administrative offices and ground leases, and numerous office equipment lease agreements in which it is the lessee, with lease terms exceeding twelve months.

All of the Company’s leases are classified as operating leases. These operating leases are included as a ROU asset in the premises and equipment line item on the Company’s consolidated balance sheets. The corresponding lease liability is included in the accounts payable and other liabilities line item on the Company’s consolidated balance sheets.

In the February 2022 Fortune merger, the Company assumed a ground lease with an entity that is controlled by a Company insider. This property is in St. Louis County, MO and is in its fifth year of a twenty year term.

ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. ROU assets or lease liabilities are not to be recognized for short-term leases. The calculated amount of the ROU assets and lease liabilities in the table below 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, the ASU 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 over a similar term. The range of discount rate utilized was 5.0% to 8.5%. The expected lease terms range from 18 months to 20 years.

	At or For the Twelve		At or For the Twelve
	Months Ended		Months Ended
(dollars in thousands)	June 30, 2025		June 30, 2024
Consolidated Statement of Income
Operating lease costs classified as occupancy and equipment expense	$	1,192	$	1,215
(includes short-term lease costs)
Supplemental disclosures of cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	760	$	840
ROU assets obtained in exchange for operating lease obligations:	$	—	$	2,445

At June 30, 2025, future expected lease payments for leases with terms exceeding one year were as follows:

(dollars in thousands)
2026	$	839
2027		833
2028		848
2029		850
2030		834
Thereafter		7,662
Future lease payments expected		11,866
Less: present value discount		(4,875)
Total lease liability	$	6,991

The Company leases facilities it owns or portions of facilities it owns to other third parties. The Company has determined that all of these lease agreements, in terms of being the lessor, are classified as operating leases. For the years ended June 30, 2025 and 2024, income recognized from these lessor agreements was $432,000 and $334,000, respectively. Income from lessor agreements was included in net occupancy and equipment expense.