PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2016

PREMISES AND EQUIPMENT

PREMISES AND EQUIPMENT

NOTE 8: PREMISES AND EQUIPMENT

The components of premises and equipment included in the accompanying consolidated balance sheets at December 31, are as follows:

					Estimated
					Useful Lives
(In thousands)	2016		2015		(In years)
Land	$	332	$	332	N/A
Bank premises		6,799		6,812	39
Leasehold improvements		10,394		10,789	5 – 20
Furniture, equipment, and software		20,122		21,040	3 – 7
Total gross fixed assets		37,647		38,973
Less: accumulated depreciation and amortization		24,569		23,943
Total net fixed assets	$	13,078	$	15,030

Depreciation and amortization expense related to premises and equipment amounted to $1.97 million, $2.11 million and $2.45 million in 2016, 2015 and 2014, 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 $1.45 million, $1.30 million and $1.32 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Minimum lease payments on these properties subsequent to December 31, 2016 are as follows:

(In thousands)	Amount
2017	$	1,356
2018		1,673
2019		1,352
2020		1,246
2021		677
Thereafter		3,002
Total	$	9,306

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 $635 thousand and $1.06 million at December 31, 2016 and 2015, 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 resulted in a $93 thousand offset to rent expense per year through 2023. The deferred gain included in other liabilities totaled $654 thousand and $747 thousand at December 31, 2016 and 2015.