Premises and Equipment

3 Months Ended

Mar. 31, 2022

Note 4 – Premises and Equipment

Premises and equipment at March 31, 2022 and December 31, 2021, consist of the following:

	March 31,			December 31,
	2022			2021
($ in thousands)
Leasehold improvements	$	80		$	80
Furniture, fixtures, and equipment		2,437			2,219
Construction in progress		3,453			2,333
Total premises and equipment	$	5,970		$	4,632
Less accumulated depreciation		(1,439	)		(1,347	)
Premises and equipment, net	$	4,531		$	3,285

Depreciation expense was approximately $0.1 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively.

Lease Liabilities

The Company leases its facilities under noncancelable operating leases. Rent expense for three months ended March 31, 2022 and 2021 was $0.2 million and $0.1 million, respectively. Future minimum annual rental payments for these operating leases are as follows ($ in thousands):

Nine Months Ended December 31, 2022	$	469
Year Ended December 31, 2023		850
Year Ended December 31, 2024		1,104
Year Ended December 31, 2025		1,086
Year Ended December 31, 2026		1,118
Year Ended December 31, 2027		1,152
Thereafter		2,203
Total		7,982
Less present value discount		(596	)
Operating lease liabilities	$	7,386

The Company entered into one lease during the three months ended March 31, 2022 to provide additional space while the Murray office construction is completed. ASC 842 does not apply due to the short-term period of this lease and immateriality. The tables below present information regarding the Company’s lease assets and liabilities. Comparative periods and disclosures are not presented here due to adoption of ASC 842 on January 1, 2022.

	Three Months Ended March 31,
	2022

Operating cash flows from operating leases (in thousands)	$	28
Weighted-average remaining lease term – operating leases (in years)		7.4
Weighted-average discount rate – operating leases		1.9	%

The components of lease expense were as follows (in thousands):

	Three Months Ended March 31, 2022
(in thousands)
Operating leases
Operating lease cost	$	236
Variable lease cost		4
Operating lease expense		240
Short-term lease rent expense		—
Net rent expense	$	240