Premises and Equipment

12 Months Ended

Dec. 31, 2013

NOTE 6: PREMISES AND EQUIPMENT

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



(In thousands)	2013		2012		Estimated Useful Lives (In years)
Land	$	332	$	525	N/A
Bank premises		6,782		10,476	39
Leasehold improvements		9,276		8,499	5 – 20
Furniture, equipment, and software		17,694		18,124	3 – 7
Total gross fixed sssets		34,084		37,624
Less: accumulated depreciation and amortization		18,512		21,547
Total net fixed assets	$	15,572	$	16,077

Depreciation and amortization expense related to premises and equipment amounted to $2.18 million, $1.95 million and $1.89 million in 2013, 2012 and 2011, 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 $1.20 million, $1.08 million and $1.02 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Minimum lease payments on these properties subsequent to December 31, 2013 are as follows:



(In thousands)	Amount
2014	$	1,406
2015		1,191
2016		1,052
2017		981
2018		976
Thereafter		5,559
Total	$	11,165

We entered into a sale leaseback arrangement for our principal office in South Burlington, Vermont, in June 2008. The deferred gain on the sale leaseback transaction resulted in a $423 thousand offset to rent expense per year through 2017 and $212 thousand in 2018. The deferred gain included in other liabilities totaled $1,904 thousand and $2,327 thousand at December 31, 2013 and 2012, respectively.

We entered into a sale leaseback arrangement for one of our branch locations in Burlington, Vermont in December 2013. The deferred gain on the sale leaseback transaction will result in a $93 thousand offset to rent expense per year through 2023. The deferred gain included in other liabilities totaled $934 thousand at December 31, 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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