Premises and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Premises and Equipment

Premises and Equipment

Premises and equipment are carried at cost and consist of the following:

As of December 31,	2023		2022
Land	$	6,319,000	$	6,404,000
Land improvements	1,960,000		1,883,000
Buildings	32,180,000		30,873,000
Equipment	11,161,000		11,659,000
	51,620,000		50,819,000
Less accumulated depreciation	22,936,000		22,542,000
Total premises and equipment	$	28,684,000	$	28,277,000

Future minimum receipts under lease agreements at December 31, 2023 by year and in the aggregate are:

2024	$116,000
2025	116,000
2026	116,000
2027	116,000
2028	4,000
Thereafter	12,000
	$480,000

Leases

As part of the acquisition of its branch in Belfast, Maine in December 2020, the Company entered into an operating lease pertaining to land upon which the branch is situated. As of December 31, 2023, the lease has a term of 20 years, including an option to renew. The discount rate used in determining the lease liability was 1.875%, the FHLB advance rate in December 2020 that corresponded to the lease term. Effective December 2021, the Company entered into an operating lease for a new branch facility in Brewer, Maine. As of December 31, 2023, the lease has a term of four years. The discount rate used in determining the lease liability was 1.25%, corresponding to a synthesized rate for the same term; the synthesized rate was calculated based on several inputs including FHLB advance rates, brokered CD rates and U.S. Treasury Bonds, all with five year terms.

The right‑of‑use asset and lease liability by lease type, and the associated balance sheet classifications as of December 31, 2023 and 2022 were as follows:

Balance Sheet Classification
		2023	2022
Right-of-use assets:
Operating leases	Premises and equipment, net	$652,000	$737,000
Lease liabilities:
Operating leases	Other liabilities	$652,000	$737,000

Lease expense for the year ended December 31, 2023 related to these leases was $97,000. There was $97,000 lease expense for 2022 and $34,000 for 2021.

Future lease payments for operating leases with initial terms of one year or more as of December 31, 2023 are as follows:

2024	$97,000
2025	97,000
2026	91,000
2027	28,000
2028	28,000
Thereafter	403,000
Total undiscounted lease payments	744,000
Less: imputed interest	92,000
Net lease liability	$652,000