PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment at December 31,:


(Dollars in thousands)	2020		2019
Land	$	3,936	$	3,105
Buildings and improvements	14,350		13,352
Furniture, fixtures and equipment	18,701		15,553
Construction in progress	326		1,019
Leasehold improvements	3,079		1,985
	40,392		35,014
Accumulated depreciation	(14,189)		(13,040)
Premises and equipment, net	$	26,203	$	21,974

Depreciation expense totaled $3.0 million, $3.0 million and $2.8 million for 2020, 2019 and 2018, respectively.

The Company leases certain premises, for the operation of banking offices and certain equipment under operating and finance leases. At December 31, 2020, the Company had lease liabilities totaling $18.4 million, of which $18.3 million was related to operating leases and $0.2 million was related to finance leases, and right-of-use assets totaling $17.7 million, of which $17.5 million was related to operating leases and $0.2 million was related to finance leases, related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. For the year ended December 31, 2020, the weighted-average remaining lease term for finance leases was 2.3 years and the weighted-average discount rate used in the measurement of finance lease liabilities was 2.4%. At December 31, 2020, the weighted-average remaining lease term for operating leases was 12.9 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.9%.

The Company leases certain premises, for the operation of some banking offices and equipment under operating and finance leases.At December 31, 2019, the Company had lease liabilities totaling $14.8 million, of which $14.6 million was related to operating leases and $0.2 million was related to finance leases, and right-of-use assets totaling $13.5 million, of which $13.2 million was related to operating leases and $0.3 million was related to finance leases, related to these leases. For the year ended December 31, 2019, the weighted-average remaining lease term for finance leases was 2.7 years and the weighted-average discount rate used in the measurement of finance lease liabilities was 2.8%. For the year ended December 31, 2019, the weighted-average remaining lease term for operating leases was 11.8 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 3.5%.

Lease costs were as follows:


(Dollars in thousands)	December 31, 2020		December 31, 2019
Amortization of right-of-use assets, finance leases	$	65	$	77
Interest on lease liabilities, finance leases	4		6
Operating lease cost	2,072		2,120
Short-term lease cost	27		72
Variable lease cost	38		38
Total lease cost	$	2,206	$	2,313

Rent expense for the year ended December 31, 2018, prior to the adoption of ASU 2016-02, was $2.0 million.

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the year ended December 31, 2020.

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


	December 31, 2020
(Dollars in thousands)	Finance Leases		Operating Leases
2021	$	68	$	1,779
2022	59		1,623
2023	41		1,825
2024	5		1,779
2025	5		1,709
2026 and thereafter	4		14,280
Total future minimum lease payments	$	182	$	22,995
Less: Amounts representing interest	(6)		(4,723)
Present value of net future minimum lease payments	$	176	$	18,272