Premises and Equipment

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Premises and Equipment

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment as of the periods indicated:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Land	$	3,465	$	3,936
Buildings and improvements	13,393		14,350
Furniture, fixtures and equipment	16,615		17,451
Software	3,978		1,527
Construction in progress	113		49
Leasehold improvements	2,865		3,079
	40,429		40,392
Accumulated depreciation	(15,386)		(14,189)
Premises and equipment, net	$	25,043	$	26,203

We lease certain premises and equipment under operating and finance leases.

At September 30, 2021, we had lease liabilities totaling $17.1 million, of which $17.0 million was related to operating leases and $0.1 million was related to finance leases, and right-of-use assets totaling $18.2 million, of which $17.8 million was related to operating leases and $0.4 million was related to finance leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At September 30, 2021, the weighted-average remaining lease term for operating leases was 12.2 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.8%. At September 30, 2021, the weighted-average remaining lease term for finance leases was 1.9 years and the weighted-average discount rate used in the measurement of finance lease liabilities was 2.1%.

At December 31, 2020, we 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. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. 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%. At 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%.

The following table presents lease costs for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Operating lease cost	$	504	$	473	$	1,458	1,594
Short-term lease cost	2		—		4		26
Variable lease cost	9		10		29		30
Amortization of right-of-use assets, finance leases	16		13		44		49
Interest on lease liabilities, finance leases	—		1		2		3
Total lease cost	$	531	$	497	$	1,537	$	1,702

The following table presents future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more as of September 30, 2021:

(Dollars in thousands)	Operating Leases		Finance Leases
2021	$	468	$	15
2022	1,946		42
2023	1,897		5
2024	1,827		5
2025	1,826		4
2026 and thereafter	12,901		—
Total future minimum lease payments	$	20,865	$	71
Less: Amounts representing interest	(3,878)		(1)
Present value of net future minimum lease payments	$	16,987	$	70

Premises and Equipment

Note 4 – Premises and Equipment

The following table presents the components of premises and equipment as of the periods indicated:

(Dollars in thousands)	September 30, 2021		December 31, 2020
Land	$	3,465	$	3,936
Buildings and improvements	13,393		14,350
Furniture, fixtures and equipment	16,615		17,451
Software	3,978		1,527
Construction in progress	113		49
Leasehold improvements	2,865		3,079
	40,429		40,392
Accumulated depreciation	(15,386)		(14,189)
Premises and equipment, net	$	25,043	$	26,203

We lease certain premises and equipment under operating and finance leases.

At September 30, 2021, we had lease liabilities totaling $17.1 million, of which $17.0 million was related to operating leases and $0.1 million was related to finance leases, and right-of-use assets totaling $18.2 million, of which $17.8 million was related to operating leases and $0.4 million was related to finance leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At September 30, 2021, the weighted-average remaining lease term for operating leases was 12.2 years and the weighted-average discount rate used in the measurement of operating lease liabilities was 2.8%. At September 30, 2021, the weighted-average remaining lease term for finance leases was 1.9 years and the weighted-average discount rate used in the measurement of finance lease liabilities was 2.1%.

At December 31, 2020, we 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. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. 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%. At 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%.

The following table presents lease costs for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Operating lease cost	$	504	$	473	$	1,458	1,594
Short-term lease cost	2		—		4		26
Variable lease cost	9		10		29		30
Amortization of right-of-use assets, finance leases	16		13		44		49
Interest on lease liabilities, finance leases	—		1		2		3
Total lease cost	$	531	$	497	$	1,537	$	1,702

The following table presents future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more as of September 30, 2021:

(Dollars in thousands)	Operating Leases		Finance Leases
2021	$	468	$	15
2022	1,946		42
2023	1,897		5
2024	1,827		5
2025	1,826		4
2026 and thereafter	12,901		—
Total future minimum lease payments	$	20,865	$	71
Less: Amounts representing interest	(3,878)		(1)
Present value of net future minimum lease payments	$	16,987	$	70