Premises and Equipment

12 Months Ended

Dec. 31, 2012

NOTE 5: PREMISES AND EQUIPMENT

The components of premises and equipment included in the accompanying consolidated balance sheets are as follows:



(In thousands)	2012		2011		Estimated Useful Lives (In years)
Land	$	525	$	544	N/A
Bank premises		10,476		10,712	39
Leasehold improvements		8,499		6,627	5 – 20
Furniture, equipment, and software		18,124		16,376	3 – 7
Total gross fixed sssets		37,624		34,259
Less: accumulated depreciation and amortization		21,547		20,027
Total net fixed assets	$	16,077	$	14,232

Depreciation and amortization expense related to premises and equipment amounted to $1.95 million, $1.89 million and $1.70 million in 2012, 2011 and 2010, respectively.

We occupy certain banking offices under non-cancellable operating lease agreements expiring at various dates over the next 20 years. The majority of leases have multiple options with escalation clauses for increases associated with the cost of living or other variable expenses over time. Rent expense on these properties totaled $1.08 million, $1.02 million and $1.02 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Minimum lease payments on these properties subsequent to December 31, 2012 are as follows:



(In thousands)	Amount
2013	$	1,134
2014		929
2015		909
2016		809
2017		774
After 2017		4,857
Total	$	9,412

We entered into a sale leaseback arrangement for our principal office in South Burlington, Vermont, in June 2008. Deferred gains on the sale leaseback transaction resulted in a $423 thousand offset to rent expense per year through 2016 and $635 thousand thereafter.

We had no intangibles on our balance sheet at any point during 2012 or 2011, therefore no amortization was recorded during 2012 or 2011. Amortization for intangibles is expected to be zero for 2013.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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