Premises and Equipment

6 Months Ended

Jun. 30, 2020

Note 5 – Premises and Equipment

Premises and equipment were as follows:


(Dollars in thousands)	June 30, 2020		December 31, 2019
Land	$	3,936	$	3,105
Buildings and improvements	14,350		13,352
Furniture, fixtures and equipment	16,440		15,553
Construction in progress	977		1,019
Leasehold improvements	2,951		1,985
	38,654		35,014
Accumulated depreciation	(14,068)		(13,040)
Net premises and equipment	$	24,586	$	21,974

The Company leases certain premises and equipment under operating and finance leases. At June 30, 2020, the Company had lease liabilities totaling $19.6 million and right-of-use assets totaling $18.3 million related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. For the three and six months ended June 30, 2020, the weighted average remaining lease term for finance leases was 2.2 years and the weighted average discount rate used in the measurement of finance lease liabilities was 2.80%. For the three and six months ended June 30, 2020, the weighted average remaining lease term for operating leases was 10.8 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.33%.

Lease costs were as follows:


(Dollars in thousands)	Six Months Ended June 30, 2020		Three Months Ended June 30, 2020		Six Months Ended June 30, 2019		Three Months Ended June 30, 2019
Amortization of right-of-use assets, finance leases	$	36	$	18	$	40	$	20
Interest on lease liabilities, finance leases	2		1		4		2
Operating lease cost	1,121		577		1007		477
Short-term lease cost	26		12		41		16
Variable lease cost	20		10		20		10
Total lease cost	$	1,205	$	618	$	1,112	$	525

There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the six months ended June 30, 2020.

Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows:


	June 30, 2020
(Dollars in thousands)	Finance Leases		Operating Leases
2020	$	77	$	1,337
2021	77		1,334
2022	13		1,348
2023	—		1,246
2024	—		1,214
2025 and thereafter	—		17,219
Total future minimum lease payments	$	167	$	23,698
Less: Amounts representing interest	(5)		(4,211)
Present value of net future minimum lease payments	$	162	$	19,487

Premises and Equipment

Note 5 – Premises and Equipment

Premises and equipment were as follows:


(Dollars in thousands)	June 30, 2020		December 31, 2019
Land	$	3,936	$	3,105
Buildings and improvements	14,350		13,352
Furniture, fixtures and equipment	16,440		15,553
Construction in progress	977		1,019
Leasehold improvements	2,951		1,985
	38,654		35,014
Accumulated depreciation	(14,068)		(13,040)
Net premises and equipment	$	24,586	$	21,974

Lease costs were as follows:


(Dollars in thousands)	Six Months Ended June 30, 2020		Three Months Ended June 30, 2020		Six Months Ended June 30, 2019		Three Months Ended June 30, 2019
Amortization of right-of-use assets, finance leases	$	36	$	18	$	40	$	20
Interest on lease liabilities, finance leases	2		1		4		2
Operating lease cost	1,121		577		1007		477
Short-term lease cost	26		12		41		16
Variable lease cost	20		10		20		10
Total lease cost	$	1,205	$	618	$	1,112	$	525

There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the six months ended June 30, 2020.

Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows:


	June 30, 2020
(Dollars in thousands)	Finance Leases		Operating Leases
2020	$	77	$	1,337
2021	77		1,334
2022	13		1,348
2023	—		1,246
2024	—		1,214
2025 and thereafter	—		17,219
Total future minimum lease payments	$	167	$	23,698
Less: Amounts representing interest	(5)		(4,211)
Present value of net future minimum lease payments	$	162	$	19,487