NOTE 5 – LEASES

6 Months Ended

Jun. 30, 2023

Note 5 Leases

NOTE 5 – LEASES

NOTE 5 – LEASES

The Bank leases facilities and equipment with various expiration dates. The facilities leases have varying renewal options, generally require fixed annual rent, and provide that real estate taxes, insurance, and maintenance expenses are to be paid by Salisbury. On April 30, 2023, Salisbury closed its Red Oaks Mill, New York, branch and terminated the lease, which would have expired on July 31, 2023. The following table provides the assets and liabilities as of June 30, 2023 and December 31, 2022, as well as the costs of operating and financial leases, which are included in the Bank’s consolidated income statement for the six months ended June 30, 2023 and 2022.

(in thousands, except lease term and discount rate)	Classification		June 30, 2023		December 31, 2022
Assets
Operating	Other assets	$	1,125	$	1,175
Finance	Bank premises and equipment 1		3,745		3,856
Total Leased Assets		$	4,870	$	5,031
Liabilities
Operating	Other liabilities	$	1,125	$	1,175
Finance	Finance lease		4,189		4,262
Total lease liabilities		$	5,314	$	5,437
1 Net of accumulated depreciation of $832 thousand and $720 thousand, respectively.

Lease cost	Classification		Six Months Ended  June 30, 2023		Three Months Ended  June 30, 2023
Operating leases	Premises and equipment	$	163	$	86
Finance leases:
Amortization of leased assets	Premises and equipment		112		56
Interest on finance leases	Interest expense		79		39
Total lease cost		$	354	$	181

Lease cost	Classification		Six Months Ended  June 30, 2022		Three Months Ended  June 30, 2022
Operating leases	Premises and equipment	$	147	$	73
Finance leases:
Amortization of leased assets	Premises and equipment		112		77
Interest on finance leases	Interest expense		82		41
Total lease cost		$	341	$	191

Weighted Average Remaining Lease Term	June 30, 2023		December 31, 2022
Operating leases	5.3 years		5.9 years
Financing leases	21.3 years		21.5 years
Weighted Average Discount Rate 1
Operating leases	3.7	%	3.63	%
Financing leases	3.7	%	3.74	%
1 Salisbury uses the applicable FHLBB Advance rate as the discount rate, as its leases do not provide an implicit rate.

The following is a schedule by years of the present value of the net minimum lease payments as of June 30, 2023.

Future minimum lease payments (in thousands)		Operating Leases			Finance Leases
2023	$	125		$	152
2024		270			314
2025		218			323
2026		213			334
2027		188			344
Thereafter		244			4,624
Total future minimum lease payments		1,258			6,091
Less amount representing interest		(133	)		(1,902	)
Total present value of net future minimum lease payments	$	1,125		$	4,189