LEASES

Operating Leases

The Company has entered into non-cancelable operating leases for branch facilities and equipment. These leases have terms from five to thirty years. Rental expense was approximately $2.2 million in 2011, $2.3 million in 2010 and $1.7 million in 2009 and primarily represents rentals of real estate.

The following table presents the future minimum lease payments for the next five years:



	(Amounts in thousands)
2012	$	1,836
2013	1,478
2014	1,691
2015	1,366
2016	722
Thereafter	6,117
Total	$	13,210

Capital Lease Obligation

The Company leases its Monroe Main office facility, which was acquired from American Community, under a capital lease. Leases that meet the criteria for capitalization are recorded as assets and the related obligations are reflected on the accompanying balance sheets. Amortization of property under capital lease is included in depreciation expense. Included in premises and equipment at December 31, 2011 is $2.4 million as the capitalized cost of the Company’s Monroe Main office and accumulated amortization of approximately $84,891 at December 31, 2011.

The following table presents aggregate future minimum lease payments due under this capital lease obligation as of December 31, 2011:



	(Amounts in thousands)
2012	$	225
2013	226
2014	227
2015	241
2016	241
2017-2029	3,400
Total minimum lease payments	4,560
Less amount representing interest	(2,195		)
Present value of net minimum lease payments	$	2,365